Alfa Romeo: is the rinascimento over? Global sales 2018 analysis

The Giorgio project was launched not only as one of the most promising and modern in FCA’s history, but as the last opportunity for Alfa Romeo. The brand has been struggling to find its place in the premium market for almost two decades. A mix of financial problems in Fiat Group (when Marchionne arrived), the focus on Chrysler acquisition, and bad quality reputation ruined any attempt of reviving the brand.

This bad situation of the brand seemed to change when the Giulia was finally revealed in June 2015. It is the first product of the Giorgio project that aimed to place Alfa Romeo in the same level of its powerful German rivals. Sales of the Giulia started in Q2 2016 allowing the brand to return to the US market, one of its main goals. The Stelvio arrived one year later joining the profitable, appealing and fast growing SUV segment.

Thanks to the new arrivals, Alfa was able to increase its global sales by 60% in 2017 and for the first time in 6 years, they exceeded 100.000 units during what is considered its rinascimento year. Two years after the presentation of the Stelvio, Alfa Romeo is now facing uncertain times again due to the lack of more new products. What began as a promising project is now fading away as the growth is rapidly slowing down and no new cars are due to arrive before 2020.

Last year Alfa Romeo sold 120,300 cars around the world. This was the highest sales level since 2011 as the volume increased by 11% compared to the revised results for 2017. Although the growth is significant considering the challenging times the global markets faced in 2018, it was considerably lower than the increase posted in the previous year. It could be said that it is normal to see this trend following the usual commercial life cycle of cars. However, it is too early to record such a big deceleration in growth. 

Even if its sales increased in USA and China, in Europe the situation is a bit complicated. Despite the big efforts to gain traction in USA, Europe continues to be its largest market, counting for 69% of its global sales. The volume there fell by 4%, which might not be a big thing unless we think of how young the Giulia (2018 was its second full year in the market) and the Stelvio are. While the latter shined with sales up by 73%, the former recorded a drop of 29%. Such a decline is not normal for a relatively new car like the Giulia. 

Such a big decline is not usual for a relatively new car like the Alfa Romeo Giulia. The declining interest of consumers towards premium midsize sedans partly explains the bad time of the Giulia. Registrations of these vehicles fell 23% to only 165,000 units. However, the Giulia was expected to gain share as it is supposed to be in the growth phase of its commercial life. At the end, the good results of the Stelvio in Europe were not enough to offset the double-digit declines posted by the rest of the family.

Globally speaking the Alfa Romeo Stelvio took the leadership among the brand’s models counting for 39% of total volume. Its sales increased by 112% with USA almost becoming its largest market, only 755 units behind Italy. These results confirm once again that SUVs drive the growth. It was the best-selling premium D-SUV in Italy, and the second in Lithuania. It occupied the 6th position in France, the 7th in Spain, and the 13th in USA.

The Giulia was the second best-seller with 34,300 units, down by 9%. The demand fell in 32 of the 43 markets analyzed, including Italy where the volume dropped by 26%. In fact, last year the US became the largest market for the Giulia; and China the third largest. Despite the strong growth in those two markets, the volumes are still too small.

The rest of the story is known: the demand of the Giulietta, Mito and 4C fell by 20% counting for 33% of the brand’s total. The hatchbacks are quite old (Mito turned 10 last year; Giulietta is two years younger) and the 4C is living its final days. As the company delays the new generation Giulietta, Alfa Romeo is likely to have a short range of products once again. The Alfa Romeo Tonale is a concept and is not expected to hit the dealers before the second half of 2020.

The situation of Alfa is even more dramatic when looking at the latest sales data. The volume sold during the first two months of this year has tumbled by 46%, 22%, 26% and 61% in Italy, USA, Germany and France respectively. Even the Stelvio had a bad start as its registrations fell by 18% in Italy, 14% in Germany, and 48% in France through February. If the brand doesn’t bring more models soon, the rinascimento could be just a short period of time that preceded its sale to another group. Will this be the case?