Lancia to go from all markets except Italy

Fiat and Chrysler CEO Sergio Marchionne has confirmed the Lancia brand is to be go from all international markets, and only remain on the market in Italy.

Even in Italy it will only sell one model, the Ypsilon supermini (which was Italy's third-best-selling car last year). In other European markets the current Lancia range will revert to using Chrysler badgesand model designations – as it does currently in Ireland.

Lancia has been around for 107 years now, and once was one of Europe’s most storied brands, pioneering such things as monocoque construction, V6 and V4 engines, turbocharging and compound turbocharging (using a turbo and a supercharger on the same engine).

It was a winner in F1 (with the Lancia D50 in 1956/57) and dominated the World Rally Championship in the 1970s and 1980s with such legendary models as the Stratos, O37 and the Delta Integrale. The brand has been on the retreat across Europe since rust and unreliability scandals put paid to its ambitions in the UK and Ireland in the early nineties, although Fiat did attempt a revival with the new Delta in 2008, which comprehensively failed to catch the attention of buyers.

Fiat will focus on revamping its Alfa Romeo brand after its planned merger with Chrysler and will keep production of the marque in Italy as it seeks to revive its European operations and protect jobs, its chief executive said on Friday.

In an interview with La Repubblica, Marchionne sought to reassure unions and politicians worried the merger with US group Chrysler could signal a shift away from the firm's home market, where Fiat was founded 115 years ago.

“Just as the Jeep is sold in the whole world but is American to the bone, so Alfa’s DNA has to be authentically all Italian,” he said.

“It will indeed remain at home.” Marchionne is betting on the sporty Alfa brand because he believes it can deliver the global profile that the mass-market Fiat brand cannot and far greater sales volumes than top-end Maseratis, but the strategy has so far been met with scepticism.

Fiat acquired the Alfa brand in 1986 and has since failed to revive it despite repeated attempts. In the first interview since striking a landmark $4.35 billion deal to gain full control of Chrysler, Marchionne said a potential move of the group’s listing or headquarters outside Italy was symbolic and did not mean production would be moved. Italy’s coalition government, desperately trying to protect jobs, has been closely watching the merger talks for any signs that Fiat could further diminish its presence in the country.

The carmaker employs around 62,000 people in Italy, where unemployment is running at a 37-year record of 12.7 per cent. Marchionne said the merged Fiat-Chrysler would be listed where access to capital was easier. Sources close to Fiat said last week that a primary listing in New York was most likely.

Additional reporting: Reuters