Marchionne says he is open to new alliances but won't sell Alfa Romeo

MILAN -- Fiat CEO Sergio Marchionne reiterated that Alfa Romeo will not be sold but said he remains open to forming alliances with other carmakers if it helps cut costs, especially in Europe where sales have been moribund for years.

"We are not in the business of brand-trading,"  Marchionne told analysts today on a conference call to discuss Fiat's second-quarter earnings.

Fiat is investing five billion euros in a bid to turn Alfa Romeo into a sought-after global premium brand with eight new models and annual sales of 400,000 by 2018, up from 74,000 last year.

Alfa's future lineup will be underpinned by a new rear-wheel-/all-wheel-drive architecture called Giorgio.

Alfa has failed to turn a profit during Marchionne's 10-year tenure at Fiat. In 2010, Volkswagen Chairman Ferdinand Piech offered to buy the marque, which Fiat acquired in 1986.

Marchionne has repeatedly rejected the idea, regardless of the buyer. "We are committed (to Alfa Romeo)," he told the conference call.

Alfa Romeo has only two aging models in its portfolio: the MiTo hatchback and the larger Giulietta. The brand's vehicle sales in Europe, its main market, fell to 32,769 in the first half from 36,148 the year before, according to market researchers JATO Dynamics.

Marchionne again denied recent news reports about potential merger talks with PSA/Peugeot-Citroen or Volkswagen but he said he was always ready to consider new alliances. "We have nothing to talk about," he said. "We will make an announcement when we need to."

Carmakers often work together to share the cost of developing and producing a new model. Fiat recently signed a deal for Renault to build the successor to the Scudo light commercial van based on the Renault Trafic.