What’s behind the delay of Alfa Romeo’s plans?

Alfa Romeo Giulia delayLast month monsieur Marchionne began to say that the relaunch of Alfa Romeo may take some more time. He said that the products that are due to be presented shortly will suffer some delays due to “the Chinese slow down”. This latest statement is the first directly related to the goals the brand set down in May 2014 at the investors day presentations. That day Harald J. Wester and Sergio Marchionne communicated to the world that Alfa Romeo intended to sell 400.000 units globally by the year 2018 thanks to a larger product range, better presence in Europe and its come back to North American market. One year and a half later the situation of the brand is quite complicated and nothing much has happened since that.

In May 2014 Marchionne and his team indicated that Alfa Romeo wanted to sell around 50.000 units in China by the year 2018. That's one eight part of the global target. Today the CEO says that the latest Chinese slowdown is a reason to reexamine Alfa's plan.

In May 2014 Marchionne and his team said that Alfa Romeo wanted to sell around 50.000 units in China by the year 2018. That’s one eighth of the global target. Today the CEO says that the latest Chinese slowdown is a reason to reexamine Alfa’s plan.

Currently there are 3 different new Alfa Romeos available, 1 coming and 1 to be presented shortly. The brand is back to US market with the 4C while many of its fans wait for the introduction of the Giulia. The brand will sell around 65.000 units this year and therefore it will only have 3 years to achieve the goal. As I wrote in a recent article, Alfa Romeo can sell 400.000 cars but it can’t waste more time. The Giulia should be already available and the SUV should be introduced in Geneva next year. Now both cars introduction will be delayed based on Marchionne’s new plans making even more difficult the achievement of the goal. What’s behind that? why this new announcement that leaves many fans and potential clients upset and confused? why to introduce a car more than one year after its presentation?

(1) and (2): based on FCA NV 2015.09.30 Interim Report, and Yahoo Finance. Both data as of September 30th 2015. (3): Data derived from multiple sources or calculated by Yahoo! Finance Exchange rate: Dec. 8th 2015

(1) and (2): based on FCA NV 2015.09.30 Interim Report, and Yahoo Finance. Both data as of September 30th 2015.
(3): Data derived from multiple sources or calculated by Yahoo! Finance
Exchange rate: Dec. 8th 2015

The most popular non-official reason is related to the problems FCA is having with the production of the Giulia. In the same way they had problems with the 4C and some of its components, the Giulia may be having some technical problems in its production line. However that may not be the right reason for the delay. There are some rumors that indicate that Marchionne is heading all of his effort and attention on something different: the acquisition of GM. It’s not a new issue,as he’s been saying from a long time that a marriage between the two groups would have big positive effects on their profitability. He even sent an email to Mrs. Barra, GM’s CEO, but the response has been always the same: they are not interested. Marchionne’s latest move point at a hostile takeover that includes his idea to convince GM shareholders using dedicated lobby and financial companies. Even if Marchionne denied this version, it’s probably that early next year there could be news regarding the possible partner for FCA. Based on a comment from a reader, the truth is that if things keep going like this, by the time the Giulia will be launched, it will need a facelift.

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7 responses to “What’s behind the delay of Alfa Romeo’s plans?

  1. I think it would be a big mistake for FCA to takeover or merge with GM, while they have a massive network, some great brands and new vehicle, they are loosing market around the world, have too much debt, and their volume brands would see the end of some FCA brands. The new organisation would be spread too thinly (to many brands, for the sales volume). If you look at the history or take overs/mergers, very few result in bigger, stronger and more profitable companies. Organic growth is usually better long term and FCA would be better to forget any marriage and spend their money on new models and increasing sales. They are severely lacking in several key segments, which is very worrying for their future. Joint ventures (as they are doing with Mazda PSA & Mitsubishi) are a more cost effective method of increasing market presence!

    • Thanks for your comment Robin. I agree with you: they need to focus on enlarging their current range, but the thing is that if they don’t do it quickly they won’t survive as an independent carmaker.

  2. As much good as Marchionne did to FCA he is obssessed with growing through mergers.
    Maybe it’s time for him to retire and for a new CEO to come and focus on updating the current line-up. The Giulia needs to be released, the new crossover as well. And a bunch of vehicles from Fiat and Jeep as well.

    Enough with the mergers!

  3. Alfa should be leaving this level and type of car to Maserati, Chrysler and Dodge.
    Maserati Ernesto – small exec saloon, coupe, tourer, SUV (Jaguar XE range)
    Maserati Ghibli – exec saloon, coupe, tourer, SUV (Jaguar XF, F-Pace etc)
    Maserati Quattroporte – 4dr GT style
    Maserati Alfieri – sports car (F type)

    Chrysler should be the Ford, Vauxhall/Opel competitor in Europe and the Buick competitor in USA.

    Dodge should play on the American Muscle Car look and make sporty style cars to compete with Focus RS and alike.

    Alfa should be paired with Ferrari and produce a range of small, but exclusive sports cars mirroring the Ferrari range.
    4C mid engined sports car, think small 488
    Brera front engined GT range of convertible, coupe and shooting brake
    ‘New’ super car based on proposed Dino platform, maybe with Hybrid tech, think of LaFerrari.

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