Alfa Romeo is perhaps FCA’s biggest challenge. When the brand was relaunched two years ago, the management decided to put all of its efforts on giving it back the prestigious position it used to have. Italians could not stay behind in the booming premium car market, and the heritage, name and design of Alfa Romeo could be a powerful tool to appeal many consumers around the world. To do so, the brand needed a strong product plan which included not only the usual sedan and sporty cars but also SUVs.
The Giulia and Stelvio are part of the new Alfa Romeo and are set to expand the brand’s global presence. Their impact so far has been relatively good, depending on how the numbers are analyzed. As usual, the management had big volumes in mind when both cars were revealed, but as usual, the reality is different from the optimistic forecasts made by the product planners. Is it good or bad?
When looking at the sales numbers for the Alfa Romeo Giulia and Stelvio, it is important to set aside the initial forecasts. The Giulia has been available since April 2016, and based on the monthly results in Europe, USA and China until September 2017, it is clear that is not a super-seller. It reached a sales peak in May this year with more than 5.200 units, but volume continously fell between June and August. The monthly average volume for the Giulia this year is something around 3.500 units. That’s not only below the target, but very far from its German rivals.
In the case of the Stelvio it is still early to make conclusions as it hit the dealers in February this year. Nevertheless, the monthly results confirm what we’ve seen with the Giulia: premium car market is very tough. This is even more evident for those brands arriving late to the party. Premium SUVs became popular with the arrival of the first generation Mercedes ML in 1997. It took Alfa Romeo 20 years to join the booming segment, and this of course has consequences when trying to gain market share.
The problem now is to adapt the reality to FCA’s plans. It means to reduce the production levels of both models, and delay future launches. It is not that the sales results are bad or good. What we’ve seen so far is just the response from the market that saw an absent brand for years with quality problems and lack of strategy. In fact, the results are very good considering also that its rivals have a dominant position everywhere. You can not change this from one day to the next. Fortunately, the brand is back with all of its best attributes, but it will take time, “blood” and money to see a positive outcome.