FCA Rumored To Sell Off Alfa Romeo & Maserati To Cover Debt

The Fiat Chrysler story is one of mergers and spin-offs. And the latest rumors suggest that the Italian-American auto giant could spin off two or more additional properties currently under its umbrella.

According to a report from Forbes, FCA could sell the Alfa Romeo and Maserati brands, and potentially Magneti Marnelli as well. The rumors are spurred by reports of mounting debt dragging down the group’s financial performance.

FCA closed the third quarter of 2016 – the last financial quarter reported – with nearly $7 billion in debt. The company’s performance has not been helped by a large number and scope of recalls, some of which have incurred large fines from government regulators in addition to their inherent costs.

In order to improve its bottom line, FCA under the leadership of Sergio Marchionne has shifted its focus recently. The company is prioritizing more profitable SUVs and trucks made and sold by the Jeep and Ram brands, while discontinuing production of less worthwhile small and mid-size sedans like the Dodge Dart and Chrysler 200. That may not prove enough to get FCA out of the hole, however, which is why industry analysts predict that additional spin-offs could be in store.

Fiat Chrysler Automobiles was officially formed in 2014 through the merger of the Fiat Group and Chrysler LLC after the former rescued the latter from bankruptcy. This past January, FCA spun its Ferrari brand into a separate company.

Now competing in the lucrative crossover market with the launch of the Stelvio and Levante, both the Alfa Romeo and Maserati brands could find interested buyers on the open market. The Volkswagen Group in particular has long expressed interest in adding Alfa Romeo to its portfolio of brands, though that was before the former tightened its belt in the wake of the diesel emissions scandal.

Operating more behind the scenes of the industry, Magneti Marelli is an electronic components supplier not only to FCA brands but to rival automakers as well. It does tens of billions in business every year, and its sale could in and of itself prove enough to restore its current parent company to profitability.