Sergio Marchionne hopes that betting billions of euros on Alfa Romeo will reverse a decade of losses and six years of collapsing sales at the sporty brand.
Alfa’s sales are likely to fall below 100,000 units for the first time since 1969. Marchionne’s new plan for Alfa – his fourth since he joined Fiat in June 2004 – has the same goal as the one he introduced for its sister company, Fiat’s premium subsidiary, Maserati. Under the plan, Alfa will focus on developing premium vehicles to be exported worldwide from Italy.
“We continue to work in a pretty determined fashion trying to reshape the Alfa Romeo platform and I think we will be in a position to outline more at the end of the first quarter of 2014,” Marchionne said during a conference call with analysts on Oct. 30. “We will give an opportunity to look to the five-year plan based on the thorough assessment” of Alfa Romeo and the company’s other automotive brands, he added.
He said he would reveal a new five-year strategy for Fiat Group and Chrysler next year, most likely in late April in conjunction with the company’s first-quarter earnings report.
An effective Alfa relaunch is a crucial element in Marchionne’s broader strategy to return Fiat’s automotive division to profitability in Europe by 2016. Fiat lost 700 million euros ($928 million) last year in Europe and so far Alfa has yet to make a profit under Marchionne’s nine-year watch.
The revised Alfa plan will focus on a new rear-wheel- and all-wheel-drive architecture being developed by a small team of engineers based at Maserati’s headquarters in Modena, Italy. Philippe Krieff, who reports directly to Harald Wester, Fiat-Chrysler chief technical officer and CEO of Alfa and Maserati, heads the team.
Alfa, however, will be unable to generate sufficient volume in its own right to achieve any worthwhile economies of scale. So Krieff’s architecture must be flexible enough to be used by Chrysler and Dodge brands as well. With a global volume of 101,000 units last year, Alfa sold less than one-tenth as many cars as BMW and Mercedes.
There are two key reasons for this: Alfa is product starved – its current models are the MiTo subcompact, Giulietta compact and 4C coupe. The automaker is also almost entirely dependent on a slumping European market. In the first 10 months of this year Alfa’s European sales fell 30 % to 53,604 units, according to data from the industry association ACEA.
Via Automotive News Europe