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.
Today, Dashboard brings you a video from Evo magazine. For three minutes, you can imagine yourself free from traffic, inattentive drivers, and worries on one of the world’s best driving roads in some of the world’s best cars.
Lotus is getting fat and greedy, Porsche makes more money selling SUVs to housewives than sports car enthusiasts, Aston Martin sells a rebadged Toyota. The world of sports cars is upside down. But there is hope, a small glimmer from the prodigal son of the automotive world: the Alfa Romeo 4C. This September, Alfa Romeo is set to disclose more details on the 4C at this year’s Frankfurt auto show. It may be a revised concept, or maybe, the production model.
This is not just big for car people, but for Alfa Romeo as well. Alfa is putting their hopes for a successful return to the U.S. on the back of a 1,800lb sports car. It also marks a return to Alfa making true sports cars.
The specifics so far point to the 4C as being a lightweight, turbocharged sports car. It will have a carbon fiber tub, RWD, and a turbocharged 4-cyl where it is supposed to be, the back of the car. It will also be priced in the reasonable $50,000-60,000 range. The 4C looks to replace the much loved, but nearly departed, Lotus Elise in the hearts and minds of people that enjoy driving cars, not status symbols. As for more specifics, we will have to wait until Frankfurt.
A sterling preview of Alfa Romeo’s return to the North American market. This is going to be fun!
From the Wall Street Journal:
I’m steaming northeast toward the Alps in a white Alfa Romeo Giulietta, a lovely bit of car-building falconry destined for the U.S. in 2014, if all hews to plan. It is, to put it up front, a wonderful car, with a hyper-efficient 1.4-liter, 170-horsepower turbocharged engine bolted to a slick six-speed manual transmission; an electronic limited-slip differential between the front wheels; utterly purr-fect steering feel for a front-drive car; a fuel-saving stop-start system; and Alfa Romeo’s three-stage chassis dynamics software—the DNA system—which gradually turns up the wick on the throttle, steering, torque-vectoring and braking response, while dialing down the nannying stability control. The whole is wrapped in a close-curried, stub-nosed Alfa stile that puts a pithing cane in the notion that hatchbacks are boring. This thing is about as generic as the .25 Beretta you keep in your boot.
Chrysler Chairman Sergio Marchionne will lay out the companies five year plan Wednesday which will more than double Chrysler’s annual sales from 1.3 million last year to 2.8 million by 2013. The question is “will anyone believe him”? Plans can sound good but delivering is another matter. They way I see it is that everything really hinges on how well the North American market warms to Fiat, Lancia and Alfa Romeo products.
From the Detroit Free Press:
Chrysler’s chances of ending its sales decline and returning to profitability should become clearer Wednesday, when Fiat is to lay out a five-year business plan.
The strategy for the Fiat, Alfa Romeo and Lancia brands is expected to reveal new details about the vehicles Chrysler’s North American factories will build. Also expected are details of Alfa’s return to the U.S. market, plus future product lines for Chrysler, Dodge, Jeep and the new Ram commercial-vehicle brand.
Looks like the big Alpha will be rolling again in the US and Canada in 2012. This is really big news for Chrysler/Fiat and the dealers that get to sell these attractive cars. Look for sleek styling and hopefully top notch quality that could bring in buyers who want the right pricing with as much style as they can afford. Good to see Alpha Romeo coming back to the states!
From AutoGuide.com:
According to Fiat CEO Sergio Marchionne, his company’s stylish Alfa Romeo brand will return to North America in the next 24 months, meaning that models should be on sale in 2012. “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,” said Marchionne to Automotive News.
The buzz around Chrysler has been very negative, so it’s rather surprising to here CEO Sergio Marchionne express such confidence about the prospects for the company.
After a four-month deep dive into the workings of Chrysler Group LLC, Chief Executive Sergio Marchionne remains convinced the automaker can be profitable in two years.
The Auburn Hills automaker is on track to divulge its five-year plan on Nov. 4, to make public its quarterly financial statements next year and to offer public stock as early as 2011, he said.
A recent report by analyst Adam Jonas of Morgan Stanley supports Marchionne’s forecast. Jonas said Chrysler could report an operating profit of $841 million in 2010, but end the year with a net loss of $169 million. Full profitability is expected in 2011: $2.48 billion in operating profit and $952 million in net income, Jonas said.
In an interview with Toronto’s Globe and Mail, Marchionne affirmed Thursday that the automaker could reach profitability in 24 months. Just a week before, the CEO contended that “we’re not bleeding as people think we are,” noting that “the level of cost consciousness at this house is probably at a historical high.”
Some had been speculating that Chrysler might not make it another year given its challenges in the market. Marchionne had fueled some of the negative speculation when he said in September that the situation at Chrysler was “worse than we thought.”
Marchionne has an incredible track record as a turnaround specialist, but Chrysler will present the ultimate challenge. The acquisition could be a stroke of genius, as Fiat paid nothing and now owns 20% of the company with full control in exchange for the contribution of small-car technology. Fiat dominates with small cars and this offer it the opportunity to return to America. They also have Alfa Romeo which presents an upscale brand.
That said, it was reported recently that there would be a new push to turn Chrysler into an upscale brand positioned a notch above Lincoln and Cadillac. As noted by many analysts, that seems like a real stretch. Chrysler is a mess, so now consumers are supposed to start paying a premium for their cars?
In any event, it’s refreshing to hear some optimism coming from Marchionne. Hopefully he can back it up.
Fiat has already announced that they will bring the Fiat 500 to Chrysler showrooms in the U.S. in 2010, and now they’ve announced that the Alfa Romeo MiTo will also be available in America next year.
“The MiTo is going to help us re-establish the Alfa brand in the United States,” said Richard Gadeselli, vice president for communications of the Fiat Group, in a recent interview at the company’s headquarters here.
Though Alfa Romeo left the American market in 1995, the MiTo hatchback will not really be the first new Alfa to appear in the United States since then. The 8C Competizione and Spider have been available through select Ferrari and Maserati dealers since last year. Considering the stratospheric prices of the limited-edition, hand-built 8C, the MiTo will be the first new Alfa intended for general audiences.
Both the MiTo and the 500 will be sold at Chrysler — not Ferrari — dealerships, though they will still wear Alfa and Fiat badges. American-market prices have not been announced, but $20,000 or so seems likely for the MiTo and mid-teens for the 500.
The new Alfa is aimed at “an active, thrill-seeking, performance-minded 20-something.”
I think this is a great move by Fiat. The Fiat 500 and the MiTo will give Chrysler dealerships hip vehicles that appeal to younger drivers who like the Mini Cooper and other small imports. The marketing campaign should be fun to watch.
