By on June 6, 2017

Alfa Romeo Stelvio, Image: Fiat Chrysler Automobiles

Alfa Romeo’s long-awaited Giulia sports sedan is finally trickling down to U.S. buyers in larger numbers and a performance-oriented Stelvio SUV should arrive this summer. You’d think cautious optimism for the re-introduced brand would be the order of the day. Instead, there’s massive optimism coming from Fiat Chrysler Automobiles CEO Stergio Marchionne and nothing but caution from industry analysts.

There’s also plenty of disagreement on how well the two vehicles will sell, and reality is leaning increasingly towards the analysts.

Earlier this spring, Marchionne declared his intention to sell 170,000 Alfas globally this year. The CEO hopes to see the storied Italian brand reach profitability in 2018.

While luxury utility vehicles seem like a license to print money, doubts exist about the brand’s ability to generate the kind of sales Marchionne hopes to see. Alfa sold about 73,000 vehicles last year. According to Automotive News, market research firm IHS Markit only sees 120,000 global sales in its crystal ball, with only 25,000 of those calendar year 2017 sales coming from the 2018 Stelvio — a vehicle already on sale in Europe.

While the Stelvio is a new addition to a truly hot — and competitive — segment, time will tell how buyers take to the model. As for the Giulia, it’s a bad time to be a sedan of any type. Because of this, Marchionne’s latest prediction could go in the same direction as past promises: right in the wastebasket. The CEO had anticipated annual Giulia sales in the 75,000 to 100,000-unit range, but data from JATO Dynamics shows just 18,908 sales in Europe between March 2016 and April 2017.

In the U.S., monthly sales have yet to break the 1,000-unit barrier.

One analyst, Gabriele Gambarova of Milan’s Banca Akros, told Automotive News the U.S. could soak up 20,000 Alfa sales by the end of the year. Whether or not that will help push the brand’s global sales to 170,000 units (and end a 20-year period of red ink) depends largely on whether the Stelvio can invigorate its European demand.

While Marchionne’s high hopes are now pinned squarely on the Stelvio, more crossovers are on the way. However, the first of two planned utility models won’t appear until 2019. FCA hopes to add six new models to the Alfa lineup by 2020, but even those fairly recent plans have shown signs of slipping.

[Image: Fiat Chrysler Automobiles]

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37 Comments on “Sergio Marchionne and Analysts Have Very Different Outlooks on Alfa Romeo’s Sales Future...”


  • avatar
    gomez

    The analysts should be able to predict the impact the Stelvio will have on sales since it has been on sale in Europe for several months already. I saw a number of them on the road in northern Italy in mid-April. They looked sharp, at least for an SUV.

    • 0 avatar
      JimZ

      You saw Alfas on the road in Italy, and assume this has anything to do with how they’ll sell in the rest of the world?

      • 0 avatar
        gomez

        Learn to read. I said that analysts should be able to predict the sales rate for Europe based on the sales that have already occurred in Europe. That has nothing to do with the observation I made about seeing Alfas in Italy.

  • avatar
    slavuta

    Aren’t sales usually pick in the second and third production year. People think, “I let someone else to be a test mule at first”

    • 0 avatar

      Especially a model line that tossed Check Engine lights at Car and Driver. If the magazine tester isn’t sorted, let alone massaged like we all suspect they are, what chance do you, Mr/Ms retail buyer have ?

  • avatar
    SCE to AUX

    I wouldn’t trust an Italian analyst’s viewpoint on home brand Alfa.

    20,000 units in the US in 2017?! I want that dope he’s on. Through May, Alfa’s moved 2702 (to be exact) vehicles in the US, leaving 17298 to move over the next 7 months, quintupling their monthly sales rate – not a chance.

    The Stelvio looks promising, but doesn’t every Italian car?

    • 0 avatar
      jalop1991

      “20,000 units in the US in 2017?! I want that dope he’s on.”

      Seems that VW is selling some from their stash, trying to keep the lights on.

  • avatar
    EspritdeFacelVega

    In this Euro-friendly part of Dallas I have yet to see one on the road. Of course it doesn’t help the nearest dealer is part of a Chrysler-Ram-Fiat outfit way out in dusty exurbia (and the one in Fort Worth is the same multi-make dealer who handled Alfa back in the old days). There are more Lamborghini dealers here. So that’s a problem (for Alfa, not Lambo).

  • avatar
    sportyaccordy

    Analysts shmanalysts. I’m an analysts, I’ve argued with analysts about new cars. My favorite was the ATS. I backed a dude into a corner with evidence, he starts screaming “BUT THE ANALYSTS!” If analysts were always right there would never be flops.

    That said, Sergio is way worse than the worst analyst because his only guide is his ego. This Alfa experiment is a good 15-20 years too late. They should have got their stuff together immediately after the 164, when there was no competition and this market was wide open. Entering the luxury sedan market now is like getting a seat on the NYC subway during rush hour. Good luck!

    • 0 avatar
      bd2

      Any auto analyst worth his/her salt would have been bearish on the ATS from the start.

      While the overly safe sheetmetal and chinzy interior bits didn’t help (along with the fussy CUE system), the ATS had a fundamental flaw – cramped interior/passenger space even for the compact segment.

      While the Alpha platform is a great chassis when it comes to driving dynamics/handling, the majority if luxury buyers (esp. in the US) don’t place a premium on that.

      And it’s a gift that keeps on giving in the CTS and Camaro (also cramped)- the Cadillac execs who greenlit the Alpha platform as had little clue in what they were doing.

      Esp. in light of the fact that the delay in Cadillac adding new crossover models had in part to do with the Alpha platform being unsuitable for crossover duty.

      • 0 avatar
        sportyaccordy

        Unsuitable for crossover duty? This is the first I’m hearing of this.

        But yea, rear passenger room is pretty key in all these segments. It’s a shame. GM should have taken the Alpha platform development money and made something like a Continental fighter. The people who are willing to sacrifice rear seat space for better handling aren’t in the market for luxury cars.

  • avatar

    I don’t know if the Giulia will take that many sales away from BMW but it’s certainly styled distinctively. In a segment where everyone seems to be imitating BMW’s conservative styling the Alfa stands out.

    On the other hand, can you tell me where the nearest Alfa Romeo dealer to you is? Their dealer network is pretty much non-existant.

    • 0 avatar
      hreardon

      To Ronnie’s point, and an interesting topic for discussion: The auto market is clearly getting saturated. We’re in a market where the worst cars are better than the best cars 20 years ago. If you’re going to jump in and compete, you better have something very unique and eye catching, otherwise: why bother?

      I see the new Jags and they make Toyotas and Audis look inspired. Lexus, at least, is being daring with their design language. Alfa does look pretty. Even Cadillac has a distinctive look, especially in the CT6, which I think has good (not great) road presence.

    • 0 avatar
      dwford

      My local Alfa dealer also sells Maserati, Fiat and Mitsubishi. In separate buildings next door they sell Cadillac and Jaguar. So you can imagine how horrible a place to work that is.

  • avatar
    RHD

    Lack of dealers will certainly be a problem. The reputation for low quality from Alfas in the past won’t help any, either.
    The Guilia has to be outstandingly good, at a very competitive price, with a better-than-average warranty. Alfa has the same row to hoe that Hyundai had, and will take a generation of improving quality and increasing models on offer if they plan to make any headway.
    Plymouth went the way of Pontiac, Oldsmobile, Geo and Saturn. Why would Fiat think there’s room for another brand in this market?
    One last point – Stelvio sounds like an artificial sweetener. FCA has another uphill battle on their hands.

    • 0 avatar
      thornmark

      Stevia is a natural sweetener, but I otherwise concur that Alfa quality has been such that Chrysler looks good.

      No one is clamoring for an Alfa, or at enough to matter. Hyundai isn’t apt because Hyundai was inexpensive and offered value. Alfa seems to offer exclusivity and the fastest depreciation around.

      Biturbo anyone?

    • 0 avatar
      sportyaccordy

      It’s a completely different environment now. People are keeping their cars for longer and the segments Alfa is looking to enter are fully saturated and in some cases contracting. Hyundai got their act together at the perfect moment.

    • 0 avatar
      la834

      Forget about the poor reliability reputation of Alfas from the past; the biggest problem here is the reliability reputation of Alfas of the present. Just about every American magazine and blog that’s had their hands on one has reported quality-control problems, often major ones. If FCA doesn’t get their quality act in order stat, especially on the Italian side, they’ll be toast. Add to that the sparse model range and spotty dealership network (and most that they do have do most of their business with other brands) Alfa has a steep upward hill to climb.

      As for the products themselves, the Quadrifoglio models have a Ferrari-derived engine as a unique selling proposition, but the rank-and-file models with their turbo four-bangers are a bit too undistinguished to be standouts. They really should have had something in between with a 6 of some sort, especially given the huge price gap between the base models and the Quadrifoglio.

  • avatar
    el scotto

    My Dear Sweet Jeebus! Not a Mercedes or a BMW? Sexy as hell and goes fast? Think of the I-95/I-5 corridors. They’ll sell like hotcakes there. Or, and please forgive me, they’ll sell like mad in blue states and not so well in red states. An F-150 Platinum or hot, crazy sex on four wheels.

  • avatar
    Joss

    All good points.

    Lets jump to another euro-stunt that could be pulled-off if done right. Citroen bring in the Cactus & DS as EV’s with good range and competitive pricing. Include a home installation charger. EV? Less worry about dealership and servicing. Partner your charging stations with a coffee chain or other retailer.

    • 0 avatar
      Lorenzo

      I think it’s been pointed out that EVs need maintenance, and it’s of the type that requires a visit to the dealer. There’s no getting away from them, especially for warranty work, and they may be the only game in town for diagnostics when things go wrong.

  • avatar
    Chris FOM

    My question is less about what Alfa, will sell, although that’s important. To me, though, the bigger question is what it NEEDS to sell, both in the US to justify its relaunch and globally tom justify its very existence. Not gonna lie, the Giula, especially in QV form, is desirable to me on a, irrational, visceral level in a way its German competition simply isn’t. If they can work the reliability gremlins out over the next 2 years I could see myself buying one (a very, very big “if” I realize). But if the brand’s US presence or global existence is in continued jeopardy that would kill it; I have no interest in owning an Italian super-sedan from an orphan brand no matter how desirable it is.

  • avatar

    Marchionne has been repeatedly asked to sell Alfa to Volkswagen. Perhaps he should have, for the sake of the brand. Look what Volkswagen did to Lamborghini. It kept its Italian core values, combined it with German engineering.

  • avatar
    Tstag

    Alfa has made poor to mediocre cars for the last decade. Some of those cars like the Mito are still in its range. To suddenly turn it around is unrealistic. Alfa will bleed cash for some time. Compare Alfa to Jaguar. Jaguar made some unreliable cars in the 80’s like the XJS but they still felt like luxury cars. Then under Ford they spent a decade improving reliability and dealer service. Jaguar are still rebuilding but are now coming out of their unprofitable spell and are facing a bright future. It will take at least another 5 years at Alfa to turn things around. Question is can FCA finance them that long?

    I suspect FCA will be bought out and maybe the new owners will give them the time they need. If not I suspect Alfa may get sold to someone with the budget and Finance in place to make it happen.

  • avatar
    Tstag

    One other point I really don’t think the Stelvio will sell as well as they hope. It’s a good car but it doesn’t look like enough of an SUV and to be honest I don’t like the way Alfas design language translates on to an SUV.

  • avatar
    Sjalabais

    Norway’s print conglomerate controlling most of the daily media print has called the Stelvio one of the most anticipated cars of the year, together with the new XC60. That was an incredibly odd choice, as you see the former generation’s Volvo parked on 3 of 4 corners of every intersection in Scandinavia, while Alfa Romeo sold exactly 61 cars in the country last year (nice step up from 9 in 2015 though – http://www.ofvas.no/bilsalget-i-2016/category706.html).

  • avatar
    kkop

    It’s easy to criticize Sergio for his reality-shunning predictions, but many of the B&B here on TTAC are sticking their heads just as deep in the sand.

    Despite Alfas being unreliable POS for many decades, the brand has been talked about here in breathless anticipation for many, many months. Forgiven, apparently, are Alfa’s Yugo-level reliability, as long as the sheetmetal looks good (and it does). If even the press vehicles can’t be made to perform, how reliable do you expect the one in your driveway to be?

  • avatar
    CincyDavid

    I have seen a grand total of ONE locally, and it was a charcoal gray Quadrifoglio. It would also appear that the only local Alfa dealer is in Northern KY near CVG. If they can’t foist Fiats on the public, what makes them think car buyers will line up for an Alfa?!?

    Status-hungry social climbing buttheads will only buy (lease in all likelihood) whatever is perceived as being cool, so if Alfa can somehow become cool and hip they’re all set.

    Just spent a couple of minutes on the dealer website…they have deep discounts on leftover 2015 Fiat 500s…’15s???

    That doesn’t bode well for their ability to blow Afas off the lot.

  • avatar
    stingray65

    Alfa resale value is terrible – which makes lease rates very unattractive unless heavily subsidized by FCA. 50+% in this market lease, so either they don’t move many because of unattractive lease rates or FCA loses money they don’t have subsidizing the leases. Alfa reliablity is terrible – which means many unhappy customers unless warranty and dealer service is Hyundai/Lexus like respectively, but with horrible reliability FCA will be financially destroyed by a strong warranty and dealers will go broke providing free loaner cars and free cappuccino/cannoli in the waiting area.

    The fact is there really hasn’t been a high quality Alfa since the 1930s. Studebaker, Packard, and Hudson made some excellent cars back then, but no one is seriously talking about bringing those brands back. Alfa as a serious car brand is beyond dead.

  • avatar

    THIS is the altar on which ol’ Serg sacrificed BOTH Dodge and Chrysler.

    Give it just a few years and it’ll be the inscription on FCA’s tombstone after they sell off Jeep and retreat to the old country.

    SHAME.

    • 0 avatar
      Kendahl

      My understanding is the the “F” side of FCA is losing its ass and being subsidized by the “C” side. If they ruin Chrysler, they will be done in Europe, too.

  • avatar
    Steve_S

    Reliability will be the big issue and so far they haven’t done a great job at least with the M3 fighter. Hopefully they have or will have it sorted in a short order. Luxury buyers who “buy” new tend to lease but if they are in the shop all the time they won’t get a second lease.

    Lets see how they are doing in a few years.

  • avatar
    rickness

    I can understand why sales might be slow. When the 4C came out, I enquired about the model. When it arrived , I was called. I went to the dealer to test drive and probably buy. ” oh, no, this ones not available, and you can’t test drive”. I said ” Ok, let me know when they come in”. When they came in ,I enquired what model, options and price. I was told one price, and that night I called to schedule my test drive, the price went up $ 14,000.00. With that kind of customer asssureity , I can see why when I looked on website last year at the 2016 models, I can understand why they still had 2015 models on the website. They can’t control their dealers……..

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