Alfa Romeo, Maserati very important to Fiat Chrysler’s future
Fiat Chrysler Automobiles had an ambitious plan in 2014 to bring Alfa Romeo back to the United States and sell 400,000 of the vehicles worldwide by this year.
Those numbers did not pan out, but that might not be surprising for a brand that sold only 66,000 vehicles that year and had not been part of the U.S. market for decades.
As FCA CEO Sergio Marchionne and company look to the future, the 400,000-a-year vehicle goal remains in play, but they now say that will happen by 2022. To ease the way, Alfa plans to launch a supercar, boost its electric offerings, add mid-level autonomousdriving features and give its celebrated Stelvio SUV a larger sibling.
The brand known best in the United States for a fiery red lineup — other colors are available — of Giulia sedans, Stelvios and 4C two-seaters has grown enough to become a central part of the next five-year plan for the Italian-American automaker. AlfaRomeo and its even more upscale cousin, Maserati, are two of four global brands — the others are Jeep and Ram — FCA hopes to ride to riches.
At last week’s Capital Markets Day event in Italy, Marchionne offered a key phrase to describe why brands like Alfa Romeo, Maserati, Jeep and Ram are being pushed globally, receiving the lion’s share of investment in the coming years, while others, such as Chrysler, Dodge and Fiat, will become more regional brands. He said the four are “protectable.” It goes to an idea about the importance of brand identity that Marchionne has described before. Some brands are distinctive, while those that are not risk commoditization. That could be especially problematic in a world ruled by autonomous-driving technology.
Alfa Romeo, Maserati and Jeep can stand out, the thinking goes. It’s perhaps not a surprise that in its short exposure to the U.S. market, Alfa has eclipsed Fiat in sales. Although it remains a low-volume brand, Alfa Romeo has been on something of a tear, selling more than 10,000 vehicles this year to Fiat’s fewer than 7,000, and continuing to grow.
Racing heritage
FCA has been focusing heavily on Alfa Romeo’s long history and its racing heritage, with a laundry list of world and European championships and wins at iconic races such as Mille Miglia and 24 Hours of Le Mans. Alfa Romeo even re-entered Formula 1 competition this year.
The company wants to make a case that driving an Alfa Romeo — this goes for Maserati, too — represents more a celebration of life than simply a means of getting somewhere.
A 1946 quote from Orazio Satta Piliga, Alfa’s then-head of design, included with Friday’s presentation at Balocco Proving Ground, appears to make the point:
“We are in the realm of sensations, passions, things that have more to do with the heart than the head.”
Alfa Romeo launches Stelvio SUV, but brand building will take time
A number of journalists and analysts who attended the Capital Markets Day event toured the Alfa Romeo museum in Milan, walking through a visual history lesson of classic and concept Alfa Romeos dating to its beginnings.
The museum highlights the brand’s evolution with enough eye candy to satisfy any auto addict. It includes the 24-horsepower, wooden-wheeled 1910 Torpedo, which still runs; a shiny black 1947 6C 2500 Sport Freccia d’ Oro with tiny green stripes, a car perhaps best known for its explosion in the “Godfather”; and a blue 1962 Giulia, the first Italian model to pass crash testing.
Planned supercar
So what’s in store, aside from the rumored possibility that Alfa and Maserati could someday be spun off ?
For starters, Alfa plans to launch a more than 700-horsepower supercar. The resurrected 8C sportscar would offer a mid-engine twin turbo V-6 engine, electrified front axle and carbon-fiber monocoque chassis. The combined output promises a launch time of 0-62 m.p.h in less than three seconds.
A second specialty sports car offering is also planned — an all-wheeldrive 600-horsepower GTV four-seater. Adding to the lineup would be a compact and full-size SUV and new versions of current models. Based on the presentation, the supermini MiTo, sold overseas, will eventually disappear.
Tim Kuniskis, who has been tasked with leading Alfa and Maserati, cited the Chinese premium market (2.6 million in sales), which he said outpaced the U.S. beginning in 2016, as a major focus. The Chinese government is pushing for electric vehicles, and FCA plans hybrids, mild hybrids and plugins to provide electrified options across the Alfa lineup.
In total, the plan promises seven launches for the brand, and that each Alfa Romeo offered will be new or redesigned by 2022. That’s less than the eight launches promised in 2014, but Marchionne was candid last week about the challenges in expanding the Alfa brand. He said the company did not envision the industrial complexity of the endeavor, which led to product launch delays, nor did it anticipate the aggressive reaction from German competitors.
He said it was more difficult to penetrate that portion of the luxury market than expected. Given the experience, Marchionne said he “would not do it the same way,” but he contended that the value of the Alfa Romeo strategy would eventually become clear.
Big challenge
Michelle Krebs, a senior analyst at Autotrader, said Alfa and Maserati face some stiff competition, although Maserati comes with some brand strength.
“The Germans present a formidable challenge around the globe so it will not be a cakewalk for FCA on the luxury/premium front. FCA certainly will be better positioned than it was with focus and funding of new products. But the Germans — and Asians — will not stand still and will not give up ground easily,” Krebs said.
“Alfa Romeo will be the biggest challenge,” Krebs said. “It had some fits and starts getting going and didn’t live up to its goals for the last five-year plan. It doesn’t appear that FCA expects any significant sales increases from it in the next five years. It’ll take time to get it re-established.”
Kuniskis, who last summer was promoting the fiendishly powerful Dodge Demon and capitalized on performance-based engines to boost Dodge’s image, could find an outlet in a partnership announced with Ferrari to supply the powertrains for all new Maseratis. Whether that risks undercutting or boosting what is likely the world’s most valuable auto brand in Ferrari, another Marchionne-run operation, is unclear, but it adds a selling point for a luxury brand that sold 50,000 vehicles globally in 2017 with visions of hitting 100,000 by 2022.