Volkswagen AG's management is eyeing the potential acquisition of the Alfa Romeo brand should Fiat SpA consider putting it up for sale, German auto industry newspaper Automobilwoche reported. Alfa is a globally recognized brand with sporty genes and a great tradition, the paper quoted a high ranking VW manager as saying. If such a treasure could be had, we must not hesitate ... too long.

Alfa is repeatedly brought into connection with Volkswagen, which has built up a cash cushion of 17.5 billion euros ($22.3 billion) to finance plans to overtake Toyota Motor Co in size by 2018.

As already said by (Chief Executive Sergio) Marchionne, there is no plan to sell the Alfa Romeo brand, a Fiat spokesman said on Monday, while VW declined to comment.

Volkswagen is often considered by analysts to be the most successful multibrand car company in the world, selling everything from VW Golf hatchbacks through luxury limousines from Audi to 16-tonne Scania tractor trailers.

Volkswagen's chairman, Ferdinand Piech, plans to expand its stable by two brands to a dozen overall and earlier this month completed the acquisition of the studio of Italian design icon Giorgetto Giugiaro, who penned the sleek Alfa Romeo Brera sports coupe.

Yet VW's biggest problem remains Seat, a Spanish brand that has failed to expand significantly outside of its domestic market, where it is also losing share.

At one point, Seat tried to position itself as a competitor to Alfa Romeo, which itself is reportedly losing money and sold only 100,000 cars in 2009 for the second year running.

By comparison Seat sold more than three times that number last year.

Bernstein analyst Max Warburton wrote in December of last year that technological similarities to VW's own model range could offer financial savings while handing the German carmaker control over arguably one of the European industry's most powerful names with a long and rich history in racing.

VW might look at Alfa and see a brand that it could transform into something successful. The technological links and scale benefits are clear -- Alfas are all front wheel drive, transverse engined cars, he wrote, adding an Alfa MiTo or Giuletta could be built on a VW Polo and Golf platform.

It's pretty simple in our view -- VW could kill the Seat brand and re-launch it as Alfa. Former VW CEO Bernd Pischetsrieder used to say that he wanted to turn the (struggling) Seat brand into a 'Mediterranean, emotional, sporting brand -- VW's Alfa Romeo', Warburton wrote.

Rather than imitate, why not just actually become Alfa Romeo?

(Reporting by Christiaan Hetzner; Additional reporting by Gianni Montani in Turin; Editing by Sharon Lindores)

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