The recent announcement that Alfa Romeo has delayed its U.S. relaunch one year, to 2013, should not come as a surprise to those following the brand. This is the same brand that for 10 years has teased, taunted, and promised to make a return back to our shores, but has never delivered. However, to Fiat dealers that bought in to the brand only to buy Alfa Romeo dealerships, this recent announcement has them not only surprised, but also incensed.
Dealers are shocked because Alfa’s return was more certain than ever this time around. The reason is twofold. One, Alfa needed the volume that the American market offers to reach their sales targets. Second, Chrysler corp. was going to share platforms with Alfa so it would be easier to get their cars federalized. This outlook was so promising that Fiat was able to sell a franchise of dealers on the basis that they would be first in line to be able to purchase Alfa Romeo dealerships when the time arose in 2012. But what the dealers did not think of, is what car guys already know; like their cars, Alfa Romeo promises a beautiful, enriching experience that often blows up in a cloud of smoke at a moments notice.
This wait may not seem so bad to the common observer, but they may not understand how the car business works. Every car does not deliver the same amount of profit. You see, the Fiat 500, although a good product, it is not a very profitable one. Dealers bit the bullet for standalone Fiat dealers mainly because they were expecting the first seat at the table when it came to dolling out cash cow Alfa Romeo dealers. Now, due to Alfa Romeo’s delay, dealers are stuck selling low profit 500s for the next few years. If you put off a big breakfast because you were going to a Las Vegas casino buffet for lunch, but lunch never came, you wouldn’t only be starving, you’d be incredibly irate.
Still, Alfa Romeo will make it to our shores. Realistically, it is the only way that the brand can survive. However, how profitable they will be for dealers, how good their products are, and just when they are exactly coming has yet to be seen. For Fiat dealers needing that extra revenue, this wait might just be the kiss of death. For Fiat, it continues a long tradition of mismanaging what should be a blockbuster brand.
Source: Automotive News
