By on February 16, 2010

Fiat/Chrysler CEO Sergio Marchionne seems ever more committed to the idea of bringing the Alfa Romeo brand to the United States, telling Automotive News [sub]:

I’m a lot more confident now that Alfa Romeo will reconstitute a product offering that is acceptable globally, and more in particular in the United States and Canada. There is a strong likelihood that the brand will be back here within the next 24 months

Alfa Romeo may have beaten many of the reliability and quality concerns that scuttled its last US-market campaign, but the brand isn’t out of the woods by a long shot. The European market has not been kind to Alfa in recent years, as the brand has consistently lost between €200m and €400m in each of the last ten years, bleeding sales and market share every step of the way. Jeremy Clarkson might wax lyrical about the romantic appeal of Alfa’s cars, but European buyers have largely shrugged their shoulders and  bought Skodas.

So steep has been the decline in the numbers of committed Alfisti that Marchionne has been flirting with shutting down Alfa altogether. First the brand was put in “strategic review,” then Fiat bundled it up with Maserati and Abarth into a new “sales channel.” New product development has been frozen until the new CEO of Alfa/Abarth/Maserati comes up with a strategy for the marginal brands, and the firm’s latest product has suffered from delays caused at least in part by awkwardness surrounding the initial decision to name it Milano after a city where Alfa no longer employs a significant number of workers.

And so we’re left with an awkward proposition: Alfa is not coming to conquer the states with the wind at its back, but rather bringing the brand stateside is seen as a cure for its troubles. Given the awkwardness that lingered after Alfa’s last departure from this market, this is a troubling proposition. Moreover, it highlights a questionable propensity in Marchionne’s leadership: when things aren’t working, take them global. Fiat’s Chrysler hook-up was an act of desperation that Fiat entered into when it couldn’t make an Opel deal work because, according to Marchionne’s analysis, Fiat would not be able to survive the maturation of the Chinese auto industry without the economies of scale available at 5m annual units of production. The same approach is being taken with Alfa: if it doesn’t work, find a way to build more and hope things work out for the best. Fiat’s recently-announced Russian joint venture cements the impression: Marchionne will go anywhere and partner with anyone in pursuit of volume.

In fairness, volume and economies of scale are fundamental to the business. Marchionne’s metric of volume per architecture is a highly rational approach to an industry in which distraction is a constant threat. But, as Automotive News [sub] reports, Marchionne already plans to build 700k units per year in the US by 2012 based on the new “Compact-Wide” platform that underpins the new Alfa Giuletta (neé Milano). And the plan is to brand those as seven different Chrysler Group nameplates. Given this in-house competition from brand-engineered platform-mates, Alfa has a tough row to hoe in rebuilding brand equity in the US.

And if Alfa had only to build brand loyalty on the strength of new Fiat platforms, there might be some room here for optimism. But one volume-boosting gambit begets others, and bringing Alfa to the US isn’t just about improving Fiat’s return on its new platform. A long-rumored RWD sedan based on Chrysler’s LY (300C, Charger) platform to be built in Brampton appears to be back on, with plans for a 2013 rollout. Fiat is also said to be considering other Alfa products based on Chrysler’s existing platforms. In short, Alfa may well be distinguished from Dodge by only styling, badges and some suspension/ECU tweaks. The enthusiasts are expecting traditional Italian recipes, but they’re far more likely to get the automotive equivalent the Olive Garden.

And then there’s the crucial issue of where these Alfas would be sold. Mercury’s questionable brand strategy may be driven by the needs of the dealer body, but Alfa’s US strategy will be top-down as there are no Alfa dealers left in the US. And its fighting its way into a Chrysler distribution network that’s already loaded down with brands. In addition to Dodge, Chrysler and Jeep, Fiat-Chrysler has spun Ram into its own brand, and a limited number of dealers will also host separate showrooms for the Fiat-branded 500 and 500 Abarth. Will Alfas appear as a limited lineup, destined for these Italian-themed urban sub-dealerships? Or will it attempt to offer a more complete lineup and run the risk of competing with the new, sportier, Fiat-based Dodge lineup? None of these options are without major challenges, just one of which being the problem of fitting all those brand logos on the side of dealerships.

None of which will convince enthusiasts and frustrated American Alfisti that bringing Fiat’s sporting brand stateside is a bad idea. Especially once speculation begins to coalesce around the possibilities of diesel drivetrains (not gonna happen) and another round of achingly beautiful junior-Maserati sportscars like the 8C (don’t hold your breath). But the automobile is big business, and a half-assed entry into the US market for all the wrong reasons won’t do Fiat/Chrysler any good. Nor will the new-wave Alfisti be particularly happy if the experiment once again ends with ignominious retreat. If the plan were to bring a strong brand with a successful product line into a market that showed signs of buying premium small hatches in serious volume (the well-established MINI brand saw volume slide beneath 50k units last year), We’d be the first to welcome the bella macchinas. Cynical and poorly thought-through ploys to boost platform volume and rescue dying brands just don’t inspire the same kind of enthusiasm.
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32 Comments on “Alfa In America: Glorious Return or Cynical Ploy?...”


  • avatar
    panzerfaust

    A red 2010 Brera sitting in a Chrysler showroom would be a gloriously cynical ploy.

    And I’m okay with that.

  • avatar
    chuckR

    Don’t care.

    Want.

    I owned a 164L and 164S plus a 9000CD. Same platform, but you’d never ever confuse the Alfas for the Saab. (Yes, I know some Alfisti don’t even consider the 164s as true Alfas.) Unless the only thing the Italians manufacture is the badge and grille to be installed in Chrysler’s American factories, there will be a difference.

  • avatar
    djn

    @chuckR – ditto

    @Edward “Marchionne’s motivations for bringing Alfa to the US are less than entirely admirable.” Huh? He’s supposed to turn a profit for his shareholders and build long term value for his company. Why the personal attack? Here is a guy thats actually the opposite to the deadwood management at GM that you guys decry and maybe he knows a thing or 2. Maybe you guys should go look for a 164 and a 9000 around Eugene and test your assumptions.

  • avatar
    Lokki

    Marchionne wants to save Alfa because it’s got such a powerful brand-image. That image has probably been helped by their absence here in the U.S market since good memories linger longer than bad ones. Additionally the only Alfa’s left around here in the states have become fetish objects exuding a power that is greater than their actual performance can support.

    I’m concerned that Alfa will return to the states in a form similar to the “New Thunderbird”. Such great promise delivered in such a half-assed form. (My comment on the T-Bird was that it reminded me of me – 40 years later, both the T-Bird and I still look pretty much the same as we did in 1957, but we’re both a lot fatter, softer and slower).

    The only hope that Alfa has is to recognize that it’s a niche market maker offering beauty and rwd performance over reliability and practicality. Therefore, follow the BMW/Mini model. Iconic cars – introduce a rwd Spider first, just as Mini focused on their icon. Set prices to include 4 years of maintenance and warranty, and pamper the early adopters. Hire the Mini advertising guy. After 3 years of success, then you can bring in the SUV’s et al.

    If they start selling these things in Dodge dealerships, with Alfa as a trim package, they get the worst of both worlds. The badge-only cars won’t bring in the Alfista, and the the Amurikan-car buyers will associate “Italian” with legendary “Fiat-grade-rust”

    • 0 avatar
      Dr Strangelove

      Now there is an intriguing thought – an Alfa SUV! Minivans and pickups should be a hit, too. Can’t wait to see that happen. Somewhere between the Porsche Cayenne, the Mercedes R class and the Kia Soul there lies some unexplored territory of ugliness that Alfa could claim for themselves.

    • 0 avatar
      pgcooldad

      Second Photo down. Alfa SUV is a real possibility.

      http://www.allpar.com/trucks/jeep/2011-cherokee.html

      You are obviously not an Alfista since Trucks, Ambulances, Police Cars … have all donned the Emblem.

      http://images.google.com/images?hl=en&source=hp&q=alfa%20romeo%20truck&oq=&um=1&ie=UTF-8&sa=N&tab=wi

      http://images.google.com/images?hl=en&um=1&sa=1&q=alfa+romeo+ambulance&aq=f&oq=&aqi=&start=0

      http://images.google.com/images?hl=en&um=1&sa=1&q=alfa+romeo+police+&aq=f&oq=&aqi=&start=0

      Even Military Vehicles:

      http://www.cuoresportivo.pl/_mm/ciekawe/1000mil/pics/Fot.054.jpg

    • 0 avatar
      Dr Strangelove

      pccooldad – thanks for the pics.
      You’re right, I’m not into Alfas, but I thought they were quite good-looking and intriguing. That SUV in the pic isn’t, however. Bad idea – like the trollblazer.

  • avatar
    windswords

    Well they say that the best defense is a good offense. If ALfas are languishing in foeign markets maybe a return to the US will make them a fashion hit like the MINI has become. If Sergio keeps doing what they’re doing with Alfa they are doomed (they lose money, no?).

    The trick to pulling this off is too make them as different from their Chrysler bretheren as possible (and to be heavily engineered by Itallians). Some will say that GM tried and failed at this with SAAB, but GM never gave SAAB a decent platform to build a car off of (I wonder what SAAB would have done with the Opel platform underpinning the new Lacrosse). The LX platform is still pretty good. The next one will be even better.

  • avatar
    psarhjinian

    The enthusiasts are expecting traditional Italian recipes, but they’re far more likely to get the automotive equivalent the Olive Garden.

    Enthusiasts don’t know what they want. The last Alfas that hit this shore were “different” cars from more mainstream fare available at the time; modern Alfas aren’t appreciably nicer to drive than the equivalent European Ford, and are really only distinguishable by being significantly more ugly and somewhat less reliable.

    To stretch the food analogy: It’s 1975 and you live in America but take a trip to Italy. You love the food (Italian food at the time consisting of Pizza Hut and Chef Boyardee) and wish you could get it in America. Now it’s 2010 and you go back to Italy and you find the food isn’t as unique and impressive as it was, not because the Italians are off their game, but because you can now get decent Italian food in North America.

    • 0 avatar
      B10er

      Fixed:

      “It’s 1975 and you live in America but take a trip to Italy. You love the food (Italian food at the time consisting of Pizza Hut and Chef Boyardee) and wish you could get it in America. Now it’s 2010 and you go back to Italy and you find the food isn’t as unique and impressive as it was, and you come home to the USA and find the Italian food isn’t unique or impressive either. Your only option is to live off memories of what once was, or defrost a 35 year old meal that has been sitting in your deep freezer – at least it was a culinary work of art at one point…”

  • avatar
    Morea

    Alfa needs to be extracted from the Fiat group. It will only survive as an independent manufacturer of high end cars like Aston Martin, i.e. Vantage = 8C. Or perhaps like Lotus, i.e. Elise = Alfa Romeo Diva prototype. They simply are unable to compete with the German marques head-to-head. A return to low-volume, elite-product status would be closer to Alfa’s heritage and is the only thing that will save it. Of course Maserati and Ferrari occupy this space in the Fiat Group, thus, Alfa must be spun off to be saved.

  • avatar
    jkross22

    Ed,

    Interesting analysis, but not sure your conclusions are accurate. The US is a different animal than Europe… what works there (Diesel) doesn’t necessarily work here and vice versa.

    I’m guessing that it’s target is more VW and Ford than BMW or MINI. With VW and Ford sales ascending, I’m thinking that if they keep the Alfa brand ‘pure’, meaning selling them at Chryco dealers but separately similar to how MINI’s are sold, they’ll have a shot at making this work.

    I do hope, though, that Marchionne isn’t thinking Alfa buyers will be lured into ChryCo. dealers and want crap Chrysler products. Not. Gonna. Happen.

  • avatar
    Gardiner Westbound

    Marchionne will keep dancing until he runs out of other peoples’ money or the music stops.

    • 0 avatar
      crash sled

      …and since he hasn’t put any cash into the Chrysler venture, that’s a freebie so far.

      I can see him wanting to bring on a niche vehicle, leveraged off the Chrysler presence. Italian shotguns are beautiful pieces of work, and functional, but pricier than a Remington. If Marchionne turns his niche vehicle into a Remington, it’ll be lost in the marketplace. We are heading into some years of austerity, I suspect, and this wouldn’t be the time I’d take this venture.

  • avatar
    bmoredlj

    There is a strong likelihood that the brand will be back here within the next 24 months

    Hardly committal, but whatever the motives, I’d love to see Alfa return.

  • avatar
    Maxb49

    Nothing to get excited about here.

    Do we really need one more brand of the same, boring, mass produced 4 and 6 cylinder gasoline cars? It’s not like Fiat’s presence is going to lower the prices of cars here. Nope, just one more overpriced car that brings nothing new to the market.

    Unless they bring a fully electric – hydrogen – something new to market, I’m not excited. And neither will the buying public be.

  • avatar

    I think Alfa could have credibility with the right mix of cars. I would have loved to have the 14x and 15x series here. Bring over bloated, rebadged Chryslers is, of course, a terrible idea.

  • avatar
    porschespeed

    As much as I would love to see a bunch of ALFAs running around everywhere like C Class Benzes, it just isn’t gonna happen.

    As others have noted, ALFA has to be ‘volume’ player in the same sense as Porsche and Maserati are. If you live in a metropolitan area you’ll see a few of each every day, but you won’t be swimmin’ in a sea of them, like you are BMW and Benz product.

    Bring over the 8C and a few other pieces here and there. Sell them at the trident/pony dealer. That’s where ALFAs have to be to survive, mass market small cars just don’t have the margins…

  • avatar

    How long as Fiat been teasing Alfa’s return? It has to be five years, at least.

    At least the Nuova 500 is coming this year. Allegedly. I could use a cute little 500C, living in Florida and all…

  • avatar
    Dynamic88

    This is how I’ll deal with Alfas for sale at my local Chrysler dealer.

    1) Wait 5-10 years to see what long term reliability is like.
    2) If long term reliability is better than any other maker, buy an Alfa. If long term reliability is not as good as several others, I don’t even put Alfa on my list.

    So, I’ll set my stop watch now, and in 2020, I’ll check the stats.

  • avatar

    When Chrysler implodes, all Marchionne’s plans for the U.S. market—however elegant—will go down with it.

    • 0 avatar
      Robert.Walter

      Spoke to an Chrysler Engineering Manager friend of mine recently. Had no time for a Q&A, discussed topics outside of the Chrysler realm, but twice it was mentioned that the organization is running with 1/3 the headcount vs. a year ago (and it’s not always possible to find a person with detailed historical knowledge on certain issues.)

  • avatar
    porschespeed

    RF,

    Exactly why I think the only way ALFA is viable (at all, US market or no) is to stick with the upmarket product.

    ALFA should stick with cars that fit the Maserati pricepoint/customer niche. That way the distribution channel remains once Chrysler disappears.

  • avatar

    As lovely as Alfas can be, I can’t see anyone buying them in any sustainable numbers from dealerships. Even if they are Chrysler-brand dealerships.

  • avatar
    ajla

    Two questions about this:

    1. What kind of volume does Alfa need out of North America to be viable? Are we talking Jaguar-level or Kia-level here?

    2. Why wouldn’t a lineup (sold out of the separate Fiat 500 showrooms mentioned) consisting of, let’s say, the Giuletta, 159 sedan/spider, a LY-based Alfa (with Maserati engines or the speculated Alfa V8), and a North American-only Alfa CUV have at least some chance of success? Are Alfas just not competitive vehicles?

  • avatar
    Acd

    A Chrysler LY (300C) based, rear wheel drive Alfa sedan? Who do I give my deposit to? I haven’t been able to find anything that I like better than my 300C but an Alfa 300C just might do the trick.

  • avatar

    I just read this article in the Financial Post about the prospects in 2010 for Chrysler.
    To be honest,it struck me as a very realistic approach-yes the Alfa Romeo was brought up but more important was Marchionne’s assessment of the wholesale attitude to move iron.
    He’d rather not discount cars and prefers to dump the money into ads and focusing on quality issues.
    Right now it might be merecar guy speak but you gotta like a car guy that recognizes a problem before somebody hurtles through an intersection at 100 mph.
    http://www.financialpost.com/story.html?id=2433290

  • avatar
    B10er

    This is a simple one…

    FACT: People bought Alfas in the 50s, 60s, 70s and 80s with their hearts not with their minds. Buyers bought Alfas however because driving an Alfa **WAS** more fun than much else on the road and there was a clear tangible trade-off: driving awesomeness/style/coolness VS. reliability/cost of ownership.

    This is what drove Alfa sales, but the switch to FWD saloons (the 164) began the process of giving up the emotional aspects, while gaining little in return. The tradition Alfa model (fun cars with demanding reliability) was probably doomed, but at least it was fun while it lasted.

    Today, are Alfas much more fexciting than BMWs, Minis, or Audis? Fun enough to justify the risks of buying a new car that may or may not be reliable, and may or may not be dealership supported again? It’s not like a modern Alfa Romeo is Europe’s best kept secret – they hardly sell there and are an also-ran brand.

    Alfa has become very much like SAAB was in the 90s and 2000s – its a car people WANTED to love and buy as an insider’s alternative to the masses of BMWs and Audis, BUT they were inferior in performance, driving capabilities, reliability, and fun factor. What’s the point? When SAAB ditched the hatch in North America, there was not 1 single reason left to buy one, other than its not a BMW. This will be true for Alfa.

    Some Alfas would sell in the USA, but only to hard-core Alfisti, and the handful of buyers willing to put down the hard cash just because an Alfa isn’t a BMW and they want something different. There will be a much larger group of buyers with the same mindset, but when they drive both, and add up the +/- column, most won’t actually pony up the dosh.

    Now if they could craft another RWD Alfa Coupe and Saloon that rumbled, smelled, roared, and ran like a man’s car, with modern performance and was stupid exciting to drive, then they would be onto something…

    Please note I say this as someone who LOVES olders SAABs and Alfas, and really hopes they will still somehow succeed in the future.

    • 0 avatar
      Morea

      ///Now if they could craft another RWD Alfa Coupe and Saloon that rumbled, smelled, roared, and ran like a man’s car, with modern performance and was stupid exciting to drive, then they would be onto something…///

      This sentence is the crux of the matter. Are there any “men’s cars” left anymore? With women buying more than half of all new cars can manufacturers make cars with men-only in mind? Is there anything new out there your teenage daughter could not drive reasonably well? Is the Corvette a man’s car? Is the Lotus Elise?

      Seems like everything new out there can be driven by any grandmother what with all the safety nannies, the posh interiors, the soft rides, and automatic-transmission-only models.

      What is the gearhead car of today that is not a vintage car? And, can Alfa exploit this dearth of product? Perhaps not with German sedan sales volumes but enough to make a go of it.

      The was an ad for the mid-80′s GTV6 where the tagline was “Your mother will probably refuse to ride in it.” Perhaps that’s a way forward for Alfa.

  • avatar
    MGV001

    What Marchione is going to do to Alfa has already been done to Saab by GM. And who – with a straight face – is telling them that bringing the Fiat 500 to the US is a sound business plan? They will find it hard to break the sales numbers of Smart cars. If you want an Alfa, and are willing to spend $20K+ get yourself a 70′s vintage GTV. Sadly, Alfa is history.


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