Alfa Romeo CEO's 'passion for brand' could be key to reviving its fortunes

MILAN -- Alfa Romeo's new CEO, Jean-Philippe Imparato, said his passion for the Italian sports-car brand led him to accept what could be the toughest role of his career.

Imparato, a veteran of PSA Group, was chosen to lead Alfa's Romeo's latest turnaround by Stellantis CEO Carlos Tavares in January after Alfa owner Fiat Chrysler Automobiles merged with PSA.

The French executive said he had no problem in switching from the much larger Peugeot brand, which he had led successfully, to the same role in Alfa Romeo, a company that has gone through numerous failed turnarounds. The brand currently faces steeply slumping sales and a delay in launching its crucial compact SUV.

At Peugeot, Imparato was in charge of a few thousand employees. At Alfa he said he has "a very agile team of 49 people."

"It's like a start-up, we can take decisions in five minutes," Imparato told journalists during in a media roundtable on April 19.

His move from France to Italy was not driven by career ambitions. "When you are head of the Peugeot brand, which brings in billions of euros per year, you don't go to Alfa for career reasons. You do it for personal reasons, you're driven by passion, and by family reasons," he said.

The family reasons are ancestral ties with Italy. His grandfather moved from the small coastal town of Gaeta in central Italy to France in 1904.

And his family has longtime bonds to Alfa. "When I was born, my father was driving a blue Giulia 1300, then he switched to a larger Alfetta 2000. My wife's first car was an Alfasud," Imparato said.

Over the past five years Alfa has been led by American executives working from Fiat Chrysler's U.S. headquarters in Auburn Hills, first Reid Bigland, then Tim Kuniskis. These executives also had other key roles in FCA.

Imparato said it's important that the brand is managed from Italy. He has reorganized the brand's global leadership and said his new executive team is "nearly 100 percent Italian."

Imparato is also bringing Stellantis CEO Tavares' thrifty mantra to Alfa. The brand's new global head office inside the former Fiat Centro Stile (Styling Center) in Turin covers just 200 square meters, not much bigger than a singles tennis court.

"We are frugal, and we are careful with every euro we spend," Imparato said.

This is line with the philosophy of Tavares, who turned PSA from a near-bankrupt company to one of Europe's most profitable automakers. Tavares tell his executives to spend company money in the same careful way they would with their own money.

Frugality will be a key pillar for Alfa Romeo's relaunch. "The main factors that we are looking are profitability, product quality and a solid product plan," Imparato said.

Currently Alfa only sells two models, the Giulia midsize sedan and Stelvio midsize SUV. The brand's next model, the Tonale SUV positioned below the Stelvio, is a key launch because the market for such vehicles is booming across the world.

Imparato said that he asked his team to improve the performance of the plug-in hybrid version of the Tonale, which must be available at the SUV's launch. This pushed back the sales introduction by three months. It will now go on sale in June 2022, he said.

A smaller SUV positioned below the Tonale will launch in 2023. It will be built alongside Jeep and Fiat versions in Tychy, Poland.

Imparato said Alfa's problems were not caused by its lineup. "Our current two models are fantastic," he said.

He declined to discuss further product announcements, except to say that the brand should only enter segments where it can make the right volumes and the right profits. "Every investment must bring a positive return," he said.

Alfa is working on a new 5-year plan, which will be presented once it is approved and financed by Stellantis, and on a longer-term one, looking at a 10-year time span.  Unlike his predecessors, Imparato will not disclose the 5-year plan in full.

"I will not make promises I can't fulfill. At the end of each year we will unveil the following year's program," he said.

Another break with the past is that no volume target for Alfa will be disclosed publicly. This is in line with the practice at PSA.

Former FCA CEO Sergio Marchionne unveiled multiple plans to raise Alfa's annual sales to 400,000 or more vehicles.

The brand's sales peaked at 233,000 units in the late 1980s, but production dropped to less than 60,000 in 2019 and 2020, according to union sources. FCA does not disclose global sales figures by brand. Sales will fall further this year, after the Giulietta compact hatchback was discontinued in late 2020.

"I will not shoot for 400,000 because I'm not interested. We obviously have some volume forecast, but we will not reveal them because it's not our main goal," Imparato said.

His new team will focus on margins per unit and pricing power.

Imparato aims to take Alfa to the price level of its German premium competitors, plus or minus 1 percent. "To achieve this, you have to compete on total cost of ownership, which is affected by residual value and CO2 emissions," he said.

Imparato was positively surprised by the level of Alfa brand awareness around the world. The marque has the potential to be the global premium brand of Stellantis because it enjoys a lot of brand recognition not just in Europe, but also in the U.S. and in China, he said.

He believes the quality of Alfa's current cars is already on par with the German competitors. His task is to convince the market that the residual value of those cars after 60,000 km or 90,000 km is comparable to that of German rivals such as BMW.

"I want our residual values to close the gap with our rivals in 3 to 4 years," Imparato said.

To achieve that goal, Alfa must not sell its cars "on the cheap," he said. "I don't want to see zero-kilometers [self-registrations by the automaker or its dealers] everywhere, nor import/export maneuvers."

Alfa will target a global channel mix of 45 percent private customers, 45 percent relevant fleets, and a maximum of 10 percent in direct sales and sales in other channels. "Our commercial strategy must aim to have 60 percent to 80 percent of cars built-to-order, to keep our stocks to a lean level," Imparato said.

Design will be a key element in making Alfa's cars more attractive. "Alfas should evoke a visceral reaction. You see it, you buy it," he said.

"When you entered an Alfa 1750 GT [1960s coupe], the cockpit told you were sitting in an Alfa. I want to reinterpret for the future the style language of the past," he said.

Imparato has hired former Renault and Seat executive Alejandro Mesonero-Romanos as Alfa's new design chief, according to ANE sources. Imparato did not comment on the matter.

Luca Ciferri contributed to this report