By on December 3, 2013

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For the fourth time since 2004 Fiat CEO Sergio Marchionne is reported to have devised a new plan to revive the Alfa Romeo brand, this one focused on premium vehicles made in Italy for export to the world. Alfa hasn’t made a profit in the nine years since Marchionne took the reigns at Fiat.

Marchionne’s latest plan for Alfa will be based on a new rear wheel drive architecture (with all wheel drive variants) that will be developed by a dedicated group of engineers at Maserati in Modena, headed by Philippe Krieff. Krieff reports directly to Harald Wester, Fiat-Chrysler chief technical officer and CEO of Alfa and Maserati. The new platform is seen as needed to compete with BMW and Mercedes-Benz. With sales of 101,000 units last year Alfa Romeo doesn’t really have the kind of volume to support dedicated platforms so the architecture will like be used by Chrysler and Dodge as well. Sources say it could be ultimately used for the Chrysler 300 and Dodge’s Charger and Challenger.

Right now Alfa is hampered by two factors: the brand’s primary market is Europe, where auto sales continue to be soft; and a lack of product. Currently the only models Alfa dealers offer are the MiTo subcompact, Giulietta compact and the 4C sports coupe.

The new architecture will help flesh out the Alfa lineup and be the basis of at least four new models: the Giulia mid-sized sedan and a wagon variant, a large flagship sedan and a mid-sized SUV. The first is set to launch by early 2016 and all will be sold in the United States, where Marchionne has been trying revive the Alfa Romeo brand.

Marchionne has lowered his expectations for Alfa worldwide sales from 500,000 units by 2014, to 400,000 units and last October he said the goal would be “more than 300,000 units.”

Some analysts are skeptical that Marchionne can find the cash to simultaneously regrow Alfa Romeo and buy the 41.%% of Chrysler that it needs to buy to take full control of the Auburn Hills automaker so Fiat can have access to the profits Chrysler is currently generating. Marchionne is in a bit of a Catch-22. He needs Chrysler’s cash to turn around Alfa but Fiat’s current capital structure doesn’t have enough cash to buy the rest of Chrysler to get access to that cash.

One analyst, though, Richard Hilgert, at Morningstar in Chicago, thinks that before trying to buy the rest of Chrysler Marchionne will set up a new capital structure for the Fiat group. Hilgert believes that this would let Marchionne fund the relaunch of Alfa; support new product development for Fiat in Europe; and fund the Chrysler purchase. “I think the company could negotiate a financing package prior to closing on a Chrysler deal with the VEBA [the trade union pension trust that is Chrysler's minority owner],” Hilgert said.

Maserati sales are booming and Marchionne hopes to reproduce that success with the eventual goal of exporting lots of Alfa Romeos from the group’s currently underutilized Italian plants.

“We will focus on Alfa Romeo and Maserati to access the higher end of what we consider to be a permanently polarized market,” Marchionne said in October, reiterating that Fiat would not close any Italian plants. The combined capacity of the Cassino, Melfi, Mirafiori and Pomigliano plants is more than 1 million units. Last year their combined output dropped by 18 percent to 394,620 units, ~40% of capacity, about half the utilization needed to break even.

Marchionne’s precise plan is a secret until its expected announcement next spring but the Automotive News, based on industry and supplier sources, makes the the following predictions.

Giulia: Originally planned to share the FWD bones of the upcoming redesigned Chrysler 200 and due next year, the Giulia will be switched to the new RWD/AWD architecture and launch at the earliest in late 2015. The new Giulia may be built at the Cassino plant in central Italy.

Large sedan: It was going to be derived from the Maserati Ghibli and launched by 2014 but the Maserati platform was judged to be too expensive to use so it will share the new RWD/AWD platfrom and debut at that same time as the Giulia.

Mid-sized coupe: A BMW 4 Series competitor based on the new architecture.

Large coupe: This would go up against the BMW 6 Series and may share a platform with the next Maserati GranTurismo coupe scheduled for 2016.

Roadster: Due in 2015, Mazda will build a two seat roadster for Alfa based on the next generation MX-5/Miata. It will use an uprated version of Fiat’s 1.4-liter MultiAir turbo direct injected gasoline engine.

4C coupe: European deliveries started in October. Asia will follow in Q1 of 2014 and North America in the second quarter of the year.

4C Spider: Alfa plans a version of the 4C with a removable carbon fiber roof, expected to be revealed in Geneva next March.

Compact crossover: Everyone today has to have a compact crossover. Alfa’s will be derived from the replacement for the Jeep Compass and Patriot.

Mid-sized SUV: Alfa had been considering building an Alfa variant of the new Jeep Cherokee at Jeep’s Toledo, Ohio plant but the latest reports say that it might be switched to the new RWD/AWD architecture and built in Cassino.

Large SUV: This would be based on the Maserati Levante premium large SUV that is due in early 2015 and will be built at Fiat’s Mirafiori plant in Turin.

MiTo: Alfa canceled plans for a five-door variant of the three-door MiTo. The MiTo is only sold in Europe and with the weak market there, a business case couldn’t be made for the five-door.

Giulietta: Due for a complete redesign in 2016, Alfa’s best-selling model was just face-lifted and given new electronic features.

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34 Comments on “Marchionne To Reveal Yet Another Relaunch Plan for Alfa Romeo...”


  • avatar
    Detroit-X

    You would think Marchionne would get the hint by now. And the third “Alfa hamperin’ factor” is a reputation for severe unreliablity, like Fiat (in the U.S.).

    I know a sure-fire way for Alfa to set itself apart, and to mean something unique in today’s crowded marketplace… but I’m not gonna say it. It’s very simple. Not going to give it away for free.

  • avatar
    dwford

    Ok, I’ve reached my limit on the Alfa turn around plans. I mean let’s get serious, I’ve been hearing about them literally as long as I’ve been into cars, and I’m 44. Give it up already.

    • 0 avatar
      stars9texashockey

      +1 This is getting way tiresome. Marchionne is finally being exposed as the con-artist that he is. I’m no math professor, but they sold 100,000 in 2012 and planning 500,000—400,000—”more than 300,000″ in 2014? Whoops—Just say your post OldandSlow. You’re absolutely correct.

    • 0 avatar
      CoreyDL

      Yup. Not gonna happen.

    • 0 avatar

      Everytime there’s news of this I come on and comment, get used it, that’s how your new bosses work. They don’t even know until the firt cars come rolloing down the line. Nothing of this, or the ones before, is written in stone. There are just too many variables, rest assured that Alfa is still a question mark. I give all credence to Marchionne though as he hasn’t sold it off into the evil black hole of vw.

      FWIW, giving development to Maserati people seems like a good idea.

      • 0 avatar
        th009

        Maserati people (who are, I believe, mostly Ferrari people) know how to design a good car. But can they design one for manufacturability, so that it can be built in large numbers, sold at a competitive price (less than the Germans if you want to sell those large numbers) and still be profitable?

        Maseratis and Ferraris are craft production by comparison, not mass production.

        • 0 avatar

          Very true th009, but that where the Fiat would come in and tone it down. The Maserati/Ferrari would hopefully get it up there in driveability while the Fiat people would not ruin it taking into account the realities of the world…

          Anyways, don’t, in all truthfulness, expect anything out of this before 3-5 yrs.

  • avatar
    OldandSlow

    “Marchionne has lowered his expectations for Alfa worldwide sales from 500,000 units by 2014, to 400,000 units….”

    Does Sergio just make up numbers on the fly? If Alfa sold 101,000 units in 2012 and may only sell 70,000 vehicles this year – just how realistic is to assume a 400% increase in sales by the end of 2014?

    • 0 avatar

      No, he’s not inventing things up but playing the media game. Iagine the headlines if he said that they’d be happy just to hold on for the next couple of years. Imagine the backlash. He’s just doing his job. You can be pretty sure he knows very well his sales potential.

  • avatar
    Jacob

    What a trainwreck

  • avatar
    Hummer

    I think most Chrysler owners would rather a couple grand off then a couple grand going to bringing that eyesore overseas.

    Speaking of ChryCo does anyone else see the ad on this site comparing the dart to the Malibu? Advertising midsize space for 16k?

  • avatar
    fredtal

    Still they are so good looking and I want one, but I’m not going to hold my breath and it’s not like I could afford one any way.

  • avatar
    billfrombuckhead

    Finally they are selling the Dart as a small midsize.

    The Germans are printing money making high line cars, somebody needs to go after their goldmine. The Asian appliance makers haven’t had all that much success, they aimed at BMW but hit Buick and Lincoln.

    BTW, another nice sales gain for Mighty Mopar in November and Cherokee haters are thoroughly humiliated.

    • 0 avatar
      Hummer

      I’ve seen 3-4, including a trail hawk (red tow hooks) still ugly as hell.
      I don’t care if your hat is sitting sideways on your head, leaned back with one hand barely reaching the top of the wheel. Still wont make the CUV look any better.

      • 0 avatar
        krhodes1

        I think they look great. My local dealer has a couple out on the forecourt, I think they look way better in the metal than in pictures. Bet they sell a zillion of them. A very modern interpretation of “Jeep”.

        As for Alfa, let’s see some decent product.

    • 0 avatar
      probert

      When you say appliance makers are you referring to the companies that make the miata, the gtr, the wrx, the ISF(oh yeah – lexus is the best selling luxury brand in the US), LFA, the Kia anything, the Genesis, the fr-s, the brz, the … Who make engines for Lotus, Ariel, and McLaren in 2015…. Those appliance makers?

      Or maybe it’s the innate flair of BMW, Audi, and Mercedes you refer to – just kidding – or maybe you’re serious.

  • avatar
    mjz

    I have stopped drinking the Marchionne Kool-Aid:

    Strike 1: Dismal launch of FIAT 500. Underdeveloped dealer body and run by a woman who was seemingly clueless.

    Strike 2: Dismal launch of Doge Dart. Arrogantly launched with MANUAL transmissions and underdeveloped powertrains, add a dizzying array of trims and options.

    Strike 3: Dismal launch of Jeep Cherokee. Controversial front end design and questionable reliabilty/dependabilty with potential 9-speed transmission issues.

    Another Alfa Romeo revival plan? Good luck with all that.

    • 0 avatar
      billfrombuckhead

      Yeah, the dismal launch of the Cherokee with Jeep sales up 30% last month (45,000 units) and Cherokee delivering over 10,000 of those sales right at launch with many of those sales bringing Subaru, Honda, Toyota and German trade-in’s. What about the great launch of the latest Ram trucks and diesel Grand Cherokee?

      If you are going to do something, it’s better to do it right and bringing the best Alfas at just the right time makes good sense. All these proposed Alfas sound like great enthusiast cars, something the Asian appliance makers and Ford don’t seem to do so well. Alfa will be fixed before Lincoln, Acura or Infiniti.

      • 0 avatar
        mjz

        The Cherokee was supposed to go on sale in August, so if you consider that they lost August, September and most of October, 10,000 units in November isn’t all that. While it is admirable that they waited to release it until the software glitch could be addressed, it will have lingering doubts about the “fix” until proven on the road in the hands of regular consumers. While I wish them well, (I have a soft spot for Chrysler), my point remains that under Marchionne’s watch, all three major new product launches have been far from smooth. The FIAT 500 is still a marginal player, the Dart has still not recovered and should be selling two to three times the current sales volume. Perhaps the trim changes and 2.4 liter will help for 2014 (The Dart Limited and GT are absolute steals for the price and equipment levels). The Cherokee is a great product, if the transmission software glitch is truly fixed, and consumers warm up to the front end design, it should prove to be a good seller for them.

      • 0 avatar

        Yeah that’s because hey had something like 706 days of inventory piled up, get a grip

  • avatar
    NN

    This plan sounds much better than selling rebadged Mexican assembled Chrysler 200′s. If we want FWD reliable appliances we have lots of better brands to choose from. Alfa’s must sell on differentiation and heritage…it will work (see Harley Davidson). Stay as Italian as possible, and keeping the styling unique. If they build the car to the standards required to sell in North American and Chinese markets, and use existing Fiat dealer distribution, then they’ll get the sales. In Japan, too, where they do buy European brands in volume. Alfa’s brand is much stronger, IMO, than Saab or Volvo. Chinese customers haven’t been buying cars long enough to care about reliability, and they will pay a premium for European styling. That is why Maserati is now booming, and Alfa will follow suit there, which will support their business elsewhere.

  • avatar
    vcficus

    I too root for Chrysler (they’re my customer as a supplier and I’ve always had a soft spot for them as the ‘we’ll try harder’ company in the past) but you can’t make Alfas without straw… or something like that.

    Chrysler is basically a platform a year (maybe!) company right now. The 200 is launching next quarter, the Cherokee took 6 months longer than expected and they’ve delayed the new LX platform with a refresh until 2018, so the next new one is the RU minivan/crossover which is delayed months already. After that will be MAYBE the new Journey going into 2016.

    This does not seem like the massive product cadence promised by Sergio, basically because Europe fell apart.

    Now, if you think Chrysler doesn’t have resources to do a lot right now how will Italy get all this done when they’ve been bleeding cash for four years?

    Just don’t see it happening.

    • 0 avatar
      th009

      Exactly. Will wait for a fifth relaunch plan in early 2015, with Alfa sales projected to go from 50,000 in 2014 to 500,000 in 2017.

      • 0 avatar

        just see my comment above. par for the course. the important thing is to keep Alfa and keep growing Alfa. Pump money into Fiat. If all goes well, Alfa will be back. very difficult though in any short term view.

        • 0 avatar
          th009

          Marcelo, you said “… keep growing Alfa.” So far it’s been shrinking under Marchionne’s command.

          It may yet succeed, but I don’t think Marchionne’s plan announcements (Alfa or otherwise) have a lot of credibility any more. In comparison, when the US, German or Japanese companies announce plans, they actually follow through with them and introduce new models when they said they would …

          • 0 avatar

            Keep Alfa is more important for now. Keep growing will (or not) come in some ill-defined future. :)

            As to following through, the Italians eventually follow through, though what they do may or not have any resemblance to the plans. I know it drives Northern Europeans and Northern Americans distracted, but that’s how they do it. Fact is, the public is NEVER privy to the workings of an Italian company.

            Yes many weaknesses to that model. But it does grant you a flexibility that companies from other countries lack. Sometimes, and I do mean sometimes, it can work, even be a revelation, if, and it’s a big if, the leadership is good enough.

  • avatar
    CoreyDL

    My mind when AHAHGHAGHAGH when I saw that concept up there. It’s like a modern Italian E-Type! But they won’t make it, so anyway…

    I really like that color. It would look very very nice on a 6-Series.

    • 0 avatar
      NoGoYo

      Wait, I’ve seen an Alfa concept from the 50s or 60s with similar lines…

      Aha!

      http://en.wikipedia.org/wiki/Alfa_Romeo_BAT

      That’s clearly some kind of homage to the BAT-9 concept from 1955. I think even Hot Wheels made a replica of the BAT-9.

      http://en.wikipedia.org/wiki/Alfa_Romeo_Disco_Volante

      There’s a little Disco Volante in there too.

  • avatar
    AlfaRomasochist

    Le sigh.


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