What the new Alfa Romeo shouldn’t do

alfa_romeo_old_logo_by_ugomissanaThe new Alfa Romeo Giulia has several hard tasks. The Giulia (Marchionne said he likes this name), which is ready for its world premiere on June 24th at Alfa Romeo’s Arese museum, is the first of several new models that Alfa will introduce during the next 3 years in order to sell 400.000 units by the end of 2018. There have been many speculations about its look and technical features, which will be for sure fully cleared up with the introduction of the top version with almost 500 cv in a 3.0 V6 Ferrari engine to compete with the BMW M3, Audi S4 and Mercedes C63. In terms of design rumors indicate that is looks very Alfa Romeo, with a clean shape, simple, sporty and fancy at the same time. The front grill is said to be very impactful. And that’s all what we know about it.

This is the best picture taken so far to the new Alfa Romeo Giulia.

This is the best picture taken so far to the new Alfa Romeo Giulia.

But this presentation is more than a simple car reveal. It means the relaunch of the whole brand, its come back to American car market and Marchionne’s biggest challenge. If it doesn’t work this time, Alfa Romeo brand will be for sure sold to VW or any Chinese emerging giant. In the case of the new sedan it will have the tough work of not only giving back Alfa a decent image, but also gaining share in a segment dominated by the Germans. The new Alfa Romeo sedan will be for sure a reference of technology, performance and design, but it won’t be enough to conquer those driving a BMW or an Audi. Many of the people who currently own a German premium used to drive Alfa Romeos in the past but many of them ran away due to quality and service problems. To regain their trust can become one of the group’s most difficult jobs as the brand waisted a lot of time and didn’t care about them. From the point of view of the product, Alfa Romeo is for sure in the right way. The important thing is not to repeat 2 usual mistakes of the group.

Nuova Alfa Romeo GiuliaNueva Alfa Romeo GiuliaThe first one is the timing. By the time the new Alfa Romeo Giulia will be in the dealers, Audi will be preparing the arrival of its new A4/S4, BMW will for sure introduce the updated 3/4-Series and Mercedes and Jaguar will continue to gain market share thanks to their new C-Class and XE. It means that in terms of age, the Giulia will be a bit older than the new Audi, a bit younger than the Mercedes and Jaguar, and 3 years younger than the BMW. But from the technology point of view, how far is it going to be from the new Audi A4? it happened to the Giulietta some years ago: it has a good start with outstanding results in Europe just till VW updated its Golf. BMW has just presented the new 7-Series and it seems that all of its competitors look old already (the Maserati Quattroruote included). The new Alfa Giulia must beat its current and future competitors for at least 2 or 3 years.

Nouvelle Alfa Romeo GiuliaItalians must also pay attention to the continuity and this means more launches. The brand introduced the amazing 4C in late 2012 but since then it hasn’t proposed anything new (the Spider is just a variant). This means that the brand wasn’t able to keep the attention and soon the people who were enthusiast about the small sporty-car didn’t get anymore news from the brand. If Alfa intends to wait more than 1 year for its next launch, then it won’t be able to build a strong base of new clients. Hence the new Alfa Romeo D-SUV should arrive in late 2016 at the most.

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15 responses to “What the new Alfa Romeo shouldn’t do

  1. Hi Juan. A good honest analysis of what Alfa needs to overcome its market difficulties. You are 100% correct that the ownership experience in the premium sector demands build quality that must be equal to the dynamics, style and engineering of the car. Alfa prior to Fiat was strong in dynamics, style and the engineering but poor build quality. Under Fiat it lost the dynamics or engineering to match the style, and the build quality improvements still remained way under where they need to be. If the build quality is below sector standard this will negatively impact resale value, which means there’s no way that sufficient numbers of premium car buyers will even consider it to achieve 400K sales per year. I personally do not believe that even with the perfect range of vehicles that Alfa will achieve the 400K in 2018 or anytime soon. Market perceptions take a long time to change and it takes many years of consistency and superior product to make inroads, well beyond 3 years. I fear that Fiat lacks the ability to give Alfa the consistency of product and quality for a couple of decades that it will need to be successful. Nevertheless, I’m looking forward to the reveal of the Giulia and hope it really does considerably exceed the opposition’s products.

    • Hola Juan. You’re right, to change the perception of this kind of clients takes time and money. I’m sure the brand will have a great range of cars with the ultimate technology and features but this won’t be enough to regain the people’s trust. And for sure 3 years won’t be enough.

      • Hi Juan, thanks.

        The thing is: perhaps the absolute sales numbers by 20xx are irrelevant, IF the brand begins to get good word of mouth, from critics and early adopters.

        Since i think the whole issue with Alfa and Fiat historically has been profitability to keep up standards against the Germans and even Toyota/Lexus, I figure MARGINS (net of all expenses) per car are what count, more than absolute sales figures.

        I believe that is also the central preoccupation of Marchionne/Wester et al?

        The real clincher is that a lot of the Alfa r&d/engineering+dealer rollout costs will be amortized by the big volumes of esp the American brands which will adopt a lot of this as ‘FCA commons’+Jeep dealers (for eg in China and Europe)? Also, a lot of the factory refits are money spent within fca to comau etc.?

        Finally, the most important guy here will be…..Olivier francois, imo! The man’s pure genius at brand management, so….

        + they MUST hire Jeremy Clarkson (ex-TopGear), as he implored them to in a recent hilariously witty article on the Alfa 4C Spider. 🙂 He’s an old Alfa fan, loose cannon though he may be, and is well-followed in the English-speaking world at least, perhaps in some W European countries too, and China?

  2. I’m afraid 400,000 Alfas by 2018 is a pipe dream. Alfa Romeo’s launch of so many models is being rushed, and as such has a higher risk of failure. Building a brand takes years of not decades. Alfa should be concentrating on bringing two or maximum three compelling quality models to the market by 2016, and build from there. Rushing 6 new models to market in this timeframe is pure madness.

  3. “If it doesn’t work this time, Alfa Romeo brand will be for sure sold to VW or any Chinese emerging giant.”

    How do you know this “for sure”? And why on earth would FCA sell it to the Chinese?!?!?!?!

    • Because this time there won’t be another opportunity. This is the 5th time Fiat relaunches the brand. Guess what will happen if sales don’t meet the targets? who’s going to make a good offer for the brand? the Germans? rich Chinese that need a well-known brand to access to the European market?

      • But if FCA wants to survive, selling a brand of technology to the Chinese is suicidal. So my guess is that if Alfa fails this time, it will be shut down. Selling it is too big a risk.

  4. Pingback: The new Alfa Romeo Giulia and its implications on FCA’s future | Fiat Group's World·

  5. Interesting analysis above. Although see the brands as Jaguar, Land Rover leave the heartland for Tata, India…Look Volvo Cars to be sold to Geely. Why not? It works this way nowadays.

  6. I don’t know where you live, but here in Europe, Alfa Romeo has a very unique positioning and brand image.
    In two almost conflicting views:
    One the one hand, Alfa Romeo suffers from a certain “stigma” that resulted from two models that where very unsuccessfull: the 33 and the Alfasud. That together with some service issues, of course. It has been very hard for Alfa to recover it’s old glory.
    On the other hand, Alfa Romeo is recognized by almost everyone as a solid distinctive, stylish and premium quality brand.
    Everyone agrees Alfa are beautiful, stylish and distinctive, period.
    The problem is that many people in the end go for the german cars in the segments of market where Alfa Romeo has it’s models.
    Anyway… Considering what I just said, the VW Audi group president has recently said they want to buy Alfa Romeo!

    The Fiat chairman John Elkann then replied: “We would not sell Alfa even if we were offered tons of money,”
    Fiat and Chrysler CEO Sergio Marchionne said: “Alfa is part of Fiat’s operational perimeter and we’ve already invested too much to get rid of it.”
    Volkswagen AG is rumored to be pursuing Alfa Romeo. Ferdinand Piech, VW supervisory board chairman, said last March that VW is interested in Alfa, but in no hurry to buy it.
    Source: http://autoweek.com/article/car-news/alfa-romeo-not-sale-fiat-chairman-says

    Why? Because Alfa Romeo indeed has a potential to be (again) one of the most desired brands. Alfa Romeo is probably together with Lexus or jaguar the only brands outside Germany that are truly respected by the premium car buyers (and the car enthusiasts).
    Alfa Romeo has more than 100 years history. Has a very high value, and will in any way close it’s doors! Many brands out there would immediately buy the brand and revive it. If Alfa Romeo fails now for some reason, I can tell you, write down my words: VW Audi group will not give up until they buy it! With every single chinese, japanese and indian brand competing for the prize.

    Now, a brief analysis to the segments where Alfa Romeo has it’s models, and why it has been so difficult.
    The Giullietta is a direct competitor to the VW Golf (the best selling car in Europe, I think), the Audi A3, the BMW 3 series, the Toyota Auris, the Peugeot 308 and the Citroen C4. It’s a very very though segment. And Alfa sets right in the middle price range of that segment, just like the VW Golf or the Toyota Auris.
    Then you have MiTo, that is the direct competitor of the Mini (it’s primary rival), the Renault Clio, the Peugeot 208, the Citroen C3, the Citroen DS3, the Opel Corsa (vauxall Corsa in UK), the VW Polo and the Toyota Yaris. It is another tough place to be. Here, the MiTo is among the most expensive (together with the Mini and the Citroen DS3), and with the handicap of selling only a 3 doors option, in the european market where 5 doors are preferred.

  7. I don’t know where you live, but here in Europe, Alfa Romeo has a very unique positioning and brand image.
    In two almost conflicting views:
    One the one hand, Alfa Romeo suffers from a certain “stigma” that resulted from two models that where very unsuccessfull: the 33 and the Alfasud. That together with some service issues, of course. It has been very hard for Alfa to recover it’s old glory.
    On the other hand, Alfa Romeo is recognized by almost everyone as a solid distinctive, stylish and premium quality brand.
    Everyone agrees Alfa are beautiful, stylish and distinctive, period.
    The problem is that many people in the end go for the german cars in the segments of market where Alfa Romeo has it’s models.
    Anyway… Considering what I just said, the VW Audi group president has recently said they want to buy Alfa Romeo!

    The Fiat chairman John Elkann then replied: “We would not sell Alfa even if we were offered tons of money,”
    Fiat and Chrysler CEO Sergio Marchionne said: “Alfa is part of Fiat’s operational perimeter and we’ve already invested too much to get rid of it.”
    Volkswagen AG is rumored to be pursuing Alfa Romeo. Ferdinand Piech, VW supervisory board chairman, said last March that VW is interested in Alfa, but in no hurry to buy it.
    Source: http://autoweek.com/article/car-news/alfa-romeo-not-sale-fiat-chairman-says

    Why? Because Alfa Romeo indeed has a potential to be (again) one of the most desired brands. Alfa Romeo is probably together with Lexus or jaguar the only brands outside Germany that are truly respected by the premium car buyers (and the car enthusiasts).
    Alfa Romeo has more than 100 years history. Has a very high value, and will in any way close it’s doors! Many brands out there would immediately buy the brand and revive it. If Alfa Romeo fails now for some reason, I can tell you, write down my words: VW Audi group will not give up until they buy it! With every single chinese, japanese and indian brand competing for the prize.

    Now, a brief analysis to the segments where Alfa Romeo has it’s models, and why it has been so difficult.
    The Giullietta is a direct competitor to the VW Golf (the best selling car in Europe, I think), the Audi A3, the BMW 3 series, the Toyota Auris, the Peugeot 308 and the Citroen C4. It’s a very very though segment. And Alfa sets right in the middle price range of that segment, just like the VW Golf or the Toyota Auris.
    Then you have MiTo, that is the direct competitor of the Mini (it’s primary rival), the Renault Clio, the Peugeot 208, the Citroen C3, the Citroen DS3, the Opel Corsa (vauxall Corsa in UK), the VW Polo and the Toyota Yaris. It is another tough place to be. Here, the MiTo is among the most expensive (together with the Mini and the Citroen DS3), and with the handicap of selling only a 3 doors option, in the european market where 5 doors are preferred.

    • I don´t know where you live in Europe Sami Rods, but I wonder how you define the Alfa 33 and Alfasud as “very unsuccesful”. On the contrary, despite it´s famous rust-problem (which was quite as common on all the European marques, due to the poor Russian steel everyone was using back then) the Alfasud was a HUGE success and Alfasud production could not cope with the vast amount of orders. The buyers had to wait for months to get the cars they had ordered. Alfa 33 couldn’t challenge the Alfasud in terms of produced units. The Alfasud stays the only over One-Million-seller, the 33 stayed just a bit under the One-Million line. Yet both the 33 and Alfasud are the most produced Alfa-models throughout Alfas history.

      Total production number Alfasud: 715170 vehicles
      Total production number Alfasud Ti: 185665 vehicles
      Total production number (Alfasud) Sprint: 116552 vehicles
      Total prodduction number all Alfasud´s: 1017387 vehicles

      Total production number Alfa 33: 960263 vehicles

      Chances are, Alfa will never exceed those production numbers again, not even if all the new/future models/lineup were counted together…

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