Alfa In America: Glorious Return or Cynical Ploy?

Edward Niedermeyer
by Edward Niedermeyer
alfa in america glorious return or cynical ploy

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

Needless to say, this is the kind of news that gets automotive enthusiasts all hot and bothered: a European brand known for its small hatches and dynamic brio coming to a US market that’s not known for offering either. And though more choice for consumers is typically a good thing, Marchionne’s motivations for bringing Alfa to the US are less than entirely admirable. As with so many decisions made in the auto industry, keeping enthusiasts happy comes at the expense of smart business choices.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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3 of 32 comments
  • B10er B10er on Feb 16, 2010

    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.

    • Morea Morea on Feb 17, 2010

      ///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.

  • MGV001 MGV001 on Feb 17, 2010

    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.

  • Scott ?Wonder what Toyota will be using when they enter the market?
  • Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
  • Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...
  • Greg Add me to the list: 2017 Sorento EX AWD w/2.0 Turbo GDI 68K miles. Changed oil religiously with only synthetic. Checked oil level before a rare long road trip and Ievel was at least 2 quarts down. That was less than 6 months after the last oil change. I'm now adding a quart of oil every 1000 miles and checking every 500 miles because I read reports that the oil usage gets worse. Too bad, really like the 2023 Tuscon. But I have not seen Hyundai/Kia doing anything new in terms of engine development. Therefore, I have to suspect that I will ony become a victim of a fatally flawed engine development program if I were to a purchase another Kia/Hyundai.
  • Craiger 1970s Battlestar Galactica Cylon face.