Why Marchionne's third relaunch plan for the troubled sports car brand has to succeed

Alfa Romeo's last chance

Why Marchionne's third relaunch plan for the troubled sports car brand has to succeed

Luca Ciferri is Automotive News Europe's Editor-in-Chief.Luca Ciferri is Automotive News Europe's Editor-in-Chief.
Other blogs

Alfa Romeo has been a never-ending headache for Fiat CEO Sergio Marchionne.

"The Alfa issue is complicated and simple at the same time. Alfa is a great, world-renowned brand, but it is selling fewer cars than planned," he told me during our first interview in October 2005.

Seven years and two relaunches later, Fiat's sports car subsidiary remains a Rubik's Cube that the workaholic CEO just can't seem to solve.

This year, Alfa will sell fewer than 100,000 cars. That would be the brand's worst performance since 1969. On Oct. 30, Marchionne announced a new plan for Alfa that calls for the introduction of nine new models in the next four years. In the past, Marchionne has been bullish with his predictions for future Alfa sales volumes.

Automotive News Europe print issue
This story is from Automotive News Europe's latest print issue. Our print publications provide in-depth coverage of the OEM, supplier and car retailing in Europe. They are available in print and digital formats. Click here for more on Automotive News Europe in print

Alfa’s product offensive will begin next year with the limited-edition 4C coupe.

His last plan for Alfa, announced in April 2010, predicted that the brand's sales would rise to 500,000 vehicles by 2014. This time, Marchionne refrained from giving a sales target and declined to say much about the nine new models. The new plan is a sort of declaration of intent – with no specifics.

Not for sale

The only thing Marchionne was adamant about when we discussed Alfa last month was that, despite several recent overtures from Volkswagen to buy the automaker, he has no intention to sell. "There are some things that are not for sale. If you went to [VW Chairman] Ferdinand Piech and asked to buy Audi, he would tell you it's not for sale," Marchionne said. He also believes Piech wouldn't be willing to discuss a selling price for Audi so why should he provide a price for Alfa.

"I have zero interest in selling Alfa. Period," Marchionne said. Maybe Marchionne should keep an open mind on a sale because Alfa, with its limited portfolio, is slowly dying.

Its current range includes the MiTo, a rework of the Fiat Punto subcompact that doesn't have the same DNA as a true Alfa, and the Giulietta hatchback, which is a true Alfa but does not have a wagon variant so the brand loses countless sales in Europe.

Could you imagine Audi deciding not to sell a wagon version of the A3? No chance!

That's right – Alfa has just two models to sell. By comparison Ferrari sells five different models and Maserati offers three. Alfa's product range is also getting old. The MiTo was launched in June 2008 and the Giulietta arrived in March 2010. It's no surprise that Alfa's sales are spiraling downward.

Simple solution

To survive, and eventually to grow, Alfa simply needs product, product and more product. Some 30 months ago, Marchionne said that Fiat's alliance with Chrysler was the key to Alfa's relaunch. So far, Alfa has been helping Chrysler more than vice versa. As part of the deal to rescue the U.S. automaker, Fiat gave Chrysler the Giulietta's architecture, which has been widened and lengthened to underpin the Dodge Dart.

Starting next year the architecture, which is now called CUSW (short for compact U.S. wide), will underpin the Chrysler 200 mid-sized sedan and Jeep Cherokee/Liberty medium SU V successors.

CUSW will be extended to another half-dozen Chrysler Group derivatives in the years to come. The Americanized version of the Giulietta's architecture will come back to Italy. Starting in 2015, the platform will underpin the long-overdue Giulia mid-sized sedan and wagon. The models will replace the Europe-only 159 range that was discontinued last year. The architecture also will be used on the next Giulietta, which is due in 2016 and will be made to meet North American standards so it can be sold there.

In terms of architectures, Marchionne delivered on the promise he made in April 2010, but with a twist. Originally, U.S. production of the Giulia was supposed to start this year.

Now the car will be built in Italy to help save jobs in Fiat's home country, but output of the car won't begin until 2015.

Marchionne defends the adjustments he made to the 2010 plan by saying that it took longer than he expected to get Chrysler's problems under control. "I feel a lot more comfortable with the Chrysler of today than I did two years ago," he said. He also reiterated something he's been saying for a while: "Fiat without Chrysler would not be able to execute an Alfa plan. It's that simple."

Too late?

It can't be that simple, because if it was we would have already seen the long-promised rear-wheel-drive roadster that is supposed to remind us of the iconic 1966 Alfa Duetto Spider. This model has been planned for years. Alfa enthusiasts have been told they will have to wait until 2015 for an Alfa roadster, which will be built by Mazda in Japan as a sister model to the next MX-5/Miata. But who knows if the car will be built? Mazda and Fiat haven't finalized the deal yet.

Another car that continues to be delayed is a rear-drive flagship sedan that would reconnect Alfa to its roots. This model is not expected until late 2014 and it will be another hand-me-down from a Fiat subsidiary as it will be based on the new Maserati Ghibli large sedan. Marchionne's desire and determination to turn around Alfa appear sincere, but it seems very unlikely that a very weakened Alfa -- even with a nine-car range -- will be able to compete against brands such as Audi, BMW and Mercedes-Benz.

This is truly the last hope for Alfa under Fiat. To use one of Marchionne's favorite expressions, he and the company need to act "at the speed of light," if they want to save the 102-year old brand. Any more delays or second-guessing will probably lead to a sale or a collapse with the words on the tombstone reading: R.I.P. Alfa Romeo. A great, world-renowned brand that died from lack of product.

You can reach Luca Ciferri at lciferri@crain.com.

Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)

Newsletters & Alerts
  • Sample
  • Sample
  • Sample
  • Sample
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.