Maserati is ok, but Alfa Romeo?

Maserati and Alfa RomeoRecently Maserati has become the main source of news coming from Fiat Group. Its ambitious plan for 2016 resulted in the introduction of two all-new cars in the last 6 months, that will help the brand to reach 50.000 units in the next 3 years. With the latest Ghibli, Maserati proved it can do excellent products. However, the trident brand isn’t the only one to grow exponentially in the coming years. Alfa Romeo is the other brand that should jump from 70.000 units this year to 300.000 in 2016. Most of the analysts consider this goal to be unrealistic as Alfa Romeo counts on only 2 models at the moment, and its presence is extremely concentrated in Europe. Still, Louis-Carl Vignon, Alfa Romeo’s chief for Europe, believes Alfa Romeo could even exceed that number as he thinks the brand is still well positioned, has a great image, and has a range to be created and sold not only in Europe but in USA, China and other markets. We all know how Alfa Romeo is supposed to achieve this goal: new models and new markets.

The Ghibli is an example of how Maserati thinks to catch some share in E-Segment against BMW 5-Series, Audi A6, and Mercedes E-Class. The Maserati is suposed to have a higher price than them, as it will be powered by Ferrari engines and the brand wants to keep its ultra premium stamp

The Ghibli is an example of how Maserati thinks to catch some share in E-Segment against BMW 5-Series, Audi A6, and Mercedes E-Class. The Maserati is supposed to have a higher price than them, as it will be powered by Ferrari engines and the brand wants to keep its ultra premium stamp

Alfa’s strategy is to grow upmarket which means to develop bigger and more expensive cars to compete with Germans. The future Alfa Romeo Giulia will be the option in D-Segment, while Alfa is also considering a larger sedan for E-Segment based on the Ghibli. A SUV and a roadster are also in the plans. This is all good, but as one of the readers of this blog said, to grow upmarket is very difficult and may take a lot of years. Alfa Romeo is present in B and C segments and will try to catch some of BMW, Audi and Mercedes’ buyers by offering better cars.  I’m sure they will make one of the best cars for D and E segments, but the fight against Germans won’t be easy. At this point I agree with my reader, who said that Maserati should grow down-market, as it is easier. I agree with him, specially for a brand like Maserati which has a strong image. It is also the only brand of the group that could make more difficult the things for Mercedes, Audi or BMW. Other reader goes even further and talks about a Maserati D-Segment sedan, which could become a real threat to the German trio.

This figure shows the possible price strategy for Alfa Romeo and Maserati against Audi, BMW, and Mercedes-Benz. Alfa should be fighting from the bottom of the prices on each segment, and Maserati on the top. This means that Alfa Romeo prices should be one step before the Germans, and Maserati one step ahead. The prices for each segment are based on Italian market. Both brands would offer cars starting at 24.000 euro up to 95.000 from C-SUV to E-SUV.

This figure shows the possible price strategy for Alfa Romeo and Maserati against Audi, BMW, and Mercedes-Benz. Alfa should be fighting from the bottom of the prices on each segment, and Maserati on the top. This means that Alfa Romeo prices should be one step before the Germans, and Maserati one step ahead. The prices for each segment are based on Italian market. Both brands would offer cars starting at 24.000 euro up to 95.000 from C-SUV to E-SUV. This analysis doesn’t include the high performance versions such as AMG, M-Series or S-Series. 

I like this move but it must be carefully analyzed. First of all Maserati can’t do what Alfa Romeo and Lancia. I mean, Lancia and Alfa Romeo ruined their premium image by launching small and low quality products. There is no reason for a Ypsilon or a Musa. Alfa Romeo shouldn’t have developed the MiTo without having a strong offer in upper segments. Thus, Maserati must ensure its success in E and F segment in order to become a powerful premium option, and then grow down-market with strong products. I would add that all Maseratis must be positioned in an upper level than Germans, or in other words, Maserati must keep its extra luxury image in all by offering the best car in each segment (and maybe the most expensive one). Then Alfa Romeo would come on the scene. How? Fiat Group must use the best weapon for the most difficult battle: for stealing clients to BMW/Mercedes/Audi, Fiat should use Maserati. Then, when some work has been done, Alfa Romeo could introduce its new cars to steal even more clients but from the low part of the segment. This strategy would have a double impact: Maserati attacks in the upper part of the segments, and Alfa Romeo attacks in the low part. It is pretty much the same thing what the 3 German premiums are doing now in lower segments (B, C, C-SUV, C-MPV) with their latest products by attacking the upper part of them. This way Fiat could seriously compete with them and things wouldn’t be that easy for the 3 Germans. Meanwhile, Alfa Romeo should work on its current range by improving the MiTo and Giulietta with the latest technologic and mechanical features.

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19 responses to “Maserati is ok, but Alfa Romeo?

  1. “Maserati must ensure its success in E and F segment in order to become a powerful premium option, and then grow down-market with strong products. I would add that all Maseratis must be positioned in an upper level than Germans, or in other words, Maserati must keep its extra luxury image in all by offering the best car in each segment”

    I think you have exactly the right strategy for Maserati. At this point we don’t have the details on the Ghibli yet, so we’ll have to wait and see how it is positioned, and to see what Fiat management has decided for Maserati’s strategy.

    The Alfa Romeo positioning you propose makes sense as a part of a pincer attack on the premium market, but I think reaching 300K units (let alone Marchionne’s earlier, even loftier, goals) will still be a challenge.

    We’ll know a little bit once Ghibli details become known, but for the Alfa Romeo strategy we probably need to wait two (?) more years for the Giulia to appear.

    • Yes, 300K units may be a lot, but thinking of what Vignon said some weeks ago, the brand has a strong image and and a big potential. With the right product ON TIME, they could reach 300.000 units by 2016

      • The trouble with the target is that it’s for 2016 but the product (Giulia and SUV) is not arriving until 2015. How to turn around the struggling Giulietta and MiTo sales in the meantime to give the brand some momentum? Marketing, equipment, price?

      • I hope Alfa Romeo will launch the Giulia before so they can reach 300.000 units by 2016. Otherwise the MiTo and Giulietta won’t be able to do by themself. Both models will be updated this year, but there won’t be big changes.

      • Advancing the launch would definitely help. A strong brand is great, but it won’t bring revenues unless you have some good product to put it on.

  2. To me, the 300K figure would be achievable if Alfa was able to build cars that ‘ergonomically’ appeal to the mainstream. Honestly, a good start would be if they hired interior designers who actually drive cars and engineers who have spent good amount of time driving RHD cars and poorly maintained surfaces. From my own experience with a RHD Giulietta, the driver seat mounted central armrest, IPOD connection in the glovebox and poor storage is can only be the result of an interior designer who has never driven a car in their life- or at best driven a couple of kilometres. Hopefully, some of the Dodge Dart ergonomics and storage solutions are incorporated into future Alfa models. Those of you who have never driven a RHD Alfa will never understand how uncomfortable it is to have offset pedals and a central binnacle that rubs against the left leg – not to mention a lack of room for a footrest in the manual version. RHD market is UK, Japan, India, Australia, Sth Africa, Kenya, Tanzania and probably the Caribbean. Obviously, the minority in volume globally, but India potentially a huge market, Australia growing with over 1 million car sales annually, the UK and Japan also large. The offset pedal and lack of room in footwell is not an issue for the VW Golf (by way of example).
    The other problem for Alfa under Fiat is its inability to sustain sales after the first year of a model being released – why? The cars seem to have a pool of Alfisti waiting to buy the car on release, but after that, it doesn’t resonate with mainstream buyers. Once Fiat/Alfa even cares about or understands the preferences of the market, they’ll be in a better position to build models that become and remain popular. I’m still hoping Alfa is successful, with the Giulietta and Mito facelifts being critical guides to ascertain if Fiat/Alfa has been ‘getting it’ and fixing some of the things that are blatantly well below par and fixable.

    • Good point Varela. It is always good to know the opinion from RHD users. The day before yesterday I saw a RHD Alfa 4C in the streets of Turin. Lets hope they consider all your points and lets hope the updated Giulietta and MiTo (that are not suposed to be dramatically changed) include better features for those markets. Bye!

  3. Very good article Juan Felipe. I am quite positive that they will achieve the target this time. After years of mistakes I get the impression that they have understood the brand at last. It’s the correct strategy to launch the Maser first and then the 169 based on that than the other way around. Maserati has a very strong image as you say. The Alfa image needs a lot of rebuilding world wide. Not only good products but it needs good marketing and first class customer service which has been very poor. The Giulietta is a great product but it needs more variants. A sports wagon and a Sprint Coupe for example. The Mito is another matter though. I feel that the styling is too divisive and it is not special enough to stand out and get noticed. There needs to be a high performance version. When other hot hatches offer 200bhp Alfa can only offer 170bhp. That just does not grab the headlines. I hope the facelifts bring GTAs. Alfa should be the most sport out of all the Fiat group brands. However that does not mean that the others should not be sporty. Lancia for example, can be more biased to luxury and smoothness and still be sporty. I can’t understand why there isn’t a equivalent Lancia to the Mito and Punto. It would no doubt help the economies of scale. With the US market 300k should not be a problem. Just think how Fiat have managed 50k with what is essentially one model. And tiny cars are not what most US buyers want. They want Sedans and SUVs. Alfa is getting 2 sedans and one SUV. Therefore achieving 300k sales is a no-brainer. I am convinced that by 2016 if they have all these cars that they will exceed 300k globally. Meanwhile I am dreaming of having enough money in 2015 to buy the new Duetto that’s being developed with Mazda 🙂

  4. If Fiat brings Alfa Romeo to Brazil, they’ll sell a lot. If they bring to here, good products with an agressive prices, i’m sure Alfa will steal some germans sales. I wish i could buy a Giulietta but… I just cant because Fiat doesn’t sell. Every time i see an Alfa, i keep dreaming haha.

    • Alfa Romeo will be soon in Brazil with imported cars but it is expected Pernambuco plant to produce them shortly. Your dream will become true

    • I think launching the 4C first is a key to Alfa’s sucess, worldwide.
      But specially in Brazil, since FIAT dismissed the brand here, with a terrible sales strategy (Alfa was sold in FIAT dealers) and bad costumer service.
      Alfa’s image here is devasted, as in (a lot) of other countries.
      In these markets, launching the Giulietta and the Mito first will ruin everything. Will be a flop, a comedy of errors.
      They need a flagship, a fabulous supercar, like the 4C, to lift their image as a brand. Then they can ask higher prices and steal german sales.

  5. As Italian I hope that Alfa will reach its goal of 300.000 units in 2016. But I see some mayor problems that have to be tackled.
    1. CSI is still very low – desgin is attractive but the quality..or better said perceived quality is very low.
    2. Dealer Network – I don´t think that the worldwide dealer network is big and strong enough to support the ambitious goal. They would have to make lots of investments (Showroom CD).
    3. Brand Image – The image/ identity (sporty- emotional) has to be strenghtend and this takes lots of time.

    So I don´t think that they will make the 300.000 units by 2016. But I hope so:)

    • You’re right. It’s not only a matter of product. Alfa Romeo needs more nice dealerships, more image awareness. Lets hope they make it

  6. Pingback: New Chrysler 200: conceived for 2 continents | Fiat Group's World·

  7. Maserati against Porsche , instead Alfa Romeo against three premium german !!

  8. FCA have got to realise that they have potentially great set of brands, with Jeep being the only other ‘proper’ 4×4 brand, alongside LR.
    There is the Wrangler name, that has as much cache as Defender.
    There should be different models with different branding depending on the market, e.g. FIAT Toro would work in Latin America and EMEA, but should have a Ram badge for North America, India and Australia, as the branding has different meanings to different countries.
    For cars, FIAT should stick to doing a double range of small cars, chic and practical, with the different styles used in different regions, again depending on need.
    Chrysler could become a sub premium range, again, selling models depending on region, Competing with Ford, Vauxhall/Opel/Buick.
    Dodge, would become more of an American muscle style, competing with Ford RS etc. in Europe.
    Alfa should be more of junior Ferrari, with a range of sports cars, (4C, 4C spider, 4CQV, 4CQV spider), and smaller GT cars, bring back Brera as a GT in the junior executive range, maybe more shooting brake style, as a junior FF, alongside a coupe and spider version. Finally share the junior Ferrari platform to create a hybrid junior super car.
    Maserati could become a Jaguar style, with a range of saloons, coupes and SUV, from junior exec, (Jag XE), to full size, (Quattroporte).
    This would leave space for a Lancia comeback, perhaps as a super luxury, e.g. Bentley.
    Ram would be a mainly American brand, but would sell trucks in regions where the nameplate means something.

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