Alfa Romeo SpA is about to unleash the most ambitious new-model program of its 94-year history.

Between 2004-2008, the Italian sports-car maker plans to renew its entire range, enter new niches (including a small cross/utility vehicle to take on BMW AG's new X3 and a 400-hp supercar to rival Porsche's 911 Turbo) and introduce a range of all-new 4-cyl. and V-6 engines.

The strategy culminates in the surprise return to a front-engine/rear-drive layout for an all-new 167 sports sedan to challenge the Mercedes E-Class and BMW 5-Series.

Plus, Alfa plans to build on the success of the 156, but executives recognize the successor model needs a massive upgrade in ride and handling, if the 157 — Alfa has registered the name, along with 167 and 148 — is to compete with the BMW 3-Series and Mercedes C-Class.

The goal of parent Fiat Auto SpA's no-compromise Premium platform, jointly developed with Saab Automobile AB — which pulled out of the program in late 2002 — is to deliver world-class dynamics and chassis balance to match the best front-engine/rear-wheel-drive competition, while retaining all the packaging and traction advantages of front- and all-wheel drive.

With Fiat funding, Alfa says it can take on the Germans and win, turning exclusivity into an advantage.