Alfa Romeo completes prep work on new SUV

TURIN – Alfa Romeo has finished preparation work on its first SUV and the model is on track to launch next year.

Sergio Marchionne, CEO of Alfa parent Fiat Chrysler Automobiles, said the sporty brand’s second new model after the Giulia midsize sedan will go into production at the end of the first half or beginning of the second half of 2016.

"All the preparation work" in connection with the launch of the second Alfa is done, Marchionne told analysts on a conference call Thursday to discuss Fiat Chrysler’s second-quarter results. "Alfa’s plan is progressing as we told you it will go," he said.

Marchionne did not say on the call what type of vehicle the second model is, but supplier sources say it will be a midsize SUV, code-named project 949, that will be a rival to the Audi Q5 and BMW X3.

The SUV will be based on the Giulia sedan, the sources said. Its European sales launch likely will be in September or October in 2016 with a U.S. launch following about three months later.

Marchionne said Alfa has already spent almost 2 billion euros of the 5 billion euros allocated by Fiat Chrysler for the brand’s revival. The money has been used to develop the Giorgio rear-wheel-drive platform used by the Giulia, as well as its powertrains and on production startup costs.

Fiat Chrysler Chief Financial Officer Richard Palmer confirmed that the Giulia will enter production in the fourth quarter. The sedan was unveiled to selected journalists in June and will have its public debut at the Frankfurt auto show next month.

The BMW 3 series rival is scheduled to arrive at European dealerships in February and March next year and in the U.S. a few months later. The Giulia will offer high-performance engines, including a Ferrari-derived V-6. Alfa is expected to add Giulia coupe and spider variants between 2017 and 2018.

Marchionne said Alfa’s Giorgio architecture could be used for other rear-wheel-drive models within Fiat Chrysler. He did not specify which brands but Chrysler and Dodge are likely candidates.

He did not offer any new details of the timing of Alfa’s product offensive on the analysts’ call but said he hopes to have a definitive view by the end of this year. “We are taking a very hard look at the sequencing of the products that we are launching to make sure that we get the biggest bang for the buck from the utilization of the architecture in terms of volumes,” he said.

Alfa’s future product launches will include a flagship large sedan to compete with the Audi A6 and BMW 5 series. The sedan is due to enter production in late 2017, supplier sources said. A larger SUV and two compact models to replace the Giulietta are due by 2018.

In total, Alfa’s business plan includes eight cars to help the niche brand increase global annual sales to 400,000 by 2018 from fewer than 70,000 last year. Alfa currently sells just two volume models, the Giulietta and MiTo subcompact, mainly in Europe and globally two variants of the low production 4C sports car.