* Fiat aiming to establish Alfa Romeo as global brand
* U.S. re-launch seen as major challenge of Chrysler linkup
* Alfa can tap into Chrysler network, factories, platforms
* Maserati-built 4C model due out in early 2013
By Jennifer Clark
MILAN, June 27 As Italian automaker Fiat SpA
plots the U.S. relaunch of its sporty Alfa Romeo brand
there is plenty riding on its success, from a justification of
the Chrysler acquisition to the business reputation of its CEO
No wonder the company is taking its time to get it right.
Fiat has been planning to re-launch Alfa Romeo in the United
States for so long that the wait has become part of the Alfa
Romeo myth, on par with its racing prowess, showy styling and
distinctive engine squeal.
Just ask Tom Lesko, president of the Alfa Owners of New
England Club. In the summer of 2004, Lesko was planning to call
the club's annual Alfa extravaganza "Il Ritorno," or "The
But the relaunch was delayed by Marchionne and underwent a
fresh delay after Fiat took control of Chrysler in 2009.
"We had to change the name and celebrated the 'Giulietta
Jubilee' instead," Lesko recalled, referring to the Nuccio
Bertone-designed roadster that first appeared in 1954.
Now Alfa Romeo is back on the U.S. launchpad with the
low-slung Maserati-built 4C model, due out in early 2013 and
which aims to win business from the BMW Z4, Mercedes Benz SLK
and Porsche Boxster.
This time around, Fiat should be better placed because it
can tap into the Chrysler dealer network, factories and car
platforms as it battles to establish Alfa Romeo as a global
The re-launch is being watched as one of the biggest
challenges of the Fiat-Chrysler partnership, one which could be
either a crowning success capping the Fiat-Chrysler turnaround
or a blot on Marchionne's track record.
If Marchionne gets it right, Alfa Romeo could become like
Audi, which accounted for 40 percent of parent Volkswagen AG's
operating profit in the first quarter of 2012 and is
also a technology leader for the mass-market VW.
But it he misfires, Fiat-Chrysler's five-year profit targets
could be at risk and Marchionne's critics will cluck that he is
just not a "car guy" with a gut feel for product.
Marchionne has repeatedly said he doesn't want to re-launch
Alfa Romeo in the United States until the product is perfect. In
2010 he talked of "deep soul searching" to get the brand right.
And in 2011 he pushed back the Giulia sedan launch to 2014.
Chrysler dealers are itching to get going.
"We are anxious to get started with Alfa Romeo," said Bill
Golling, head of the Golling Chrysler dealership in Bloomfield
Hills, Michigan. "But I would prefer the launch, products and
marketing be right rather than rushed."
Led by Fiat-Chrysler Chief Technology Officer Harald Wester,
who designed the platform to be used by the upcoming Giulia,
Alfa's first challenge in the United States is to get the right
product that will broaden its appeal beyond the faithful who
have been waiting for decades to buy a new Alfa.
Younger buyers see the quality problem that beset Fiat and
other European mass-market carmakers in the 1980s as ancient
history, if they are even aware of them at all, said dealers and
enthusiasts alike. Alfa pulled out of the United States in 1995
because of weak sales, the wrong model range and quality issues.
The Giulia sedan and station wagon, for which
Fiat-Chrysler's design chief Lorenzo Ramaciotti is finalizing
the styling, will have a press debut in mid-2013 for a launch in
The model will be based on Fiat's "compact wide" platform, a
modular base used for the Giulietta and Dodge Dart. Fiat isn't
saying if it will be built in the United States or Italy, though
an executive at the Geneva car show said it will likely be
The larger Alfas will probably be powered by a modified
version of Chrysler's new V6 Pentastar engine. The company hints
it will also build Alfas at its factory in China which will be
opened by Marchionne on June 28.
"Chinese consumers in the know find Italian fashion
irresistible," said Michael Dunne of Dunne & Co, specializing in
Asian car markets. "Alfa Romeo would be smart to find ways to
benefit from that special appeal."
Fiat is also mulling a large E-segment sedan, while in the
sports car segment, following on from the 4C will come a new
version of the Spider - which still resonates as the car Dustin
Hoffman drove in "The Graduate" - and which debuts in 2015,
based on a shared platform with Mazda's Miata MX-5.
The new Spider will fill a huge gap in the Alfa portfolio, a
sporting brand which currently has no sportscar. The Brera was
discontinued 18 months ago due to poor sales and Alfa has
launched only two new models, the Giulietta hatchback and the
For the Spider, Fiat aims to attract younger buyers who look
at an accessibly-priced Scion FR-S or Subaru BRZ and will be
priced like the Miata MX-5 ($23,500 to $31,225), aiming for
similar volumes (5,674 in 2011, compared with around 3,500 for
the BMW Z4 or the Mercedes SLK).
The 4C should be priced in the BMW roadster or Mercedes
range ($42,000 to $67,000).
Fiat's five-year plan called for Alfa Romeo sales of 500,000
in 2014 versus 132,400 in Europe in 2011, mostly in Italy but
also in Australia, Japan and Argentina. With no European market
recovery in sight, a global target of 300,000 in 2014 is more
realistic, the company has said. BMW sold 247,907 cars in the
United States last year and Audi sold 117,561.
Fiat does not break out Alfa Romeo revenue figures and
executives admit they are disappointed by the brand's
performance since Fiat acquired it in 1986. Volkswagen has
circled around it for years as a potential acquirer.
The roll-out will be handled by a new executive for Alfa
Romeo in North America and cars will sold through the 160-strong
Fiat dealer network.
The Fiat group will be hoping to avoid mistakes such as on
its 500 mini, where it set an unrealistically high target of
50,000 in the first year (vs 19,769 sold in 2011) and switched
ad campaign in mid-course, moving from niche marketing to
mass-market with a 2012 Superbowl ad starring sultry dark-eyed
model Catrina Menghia.
A new 500 advertisement is due to debut shortly.
Fiat has arguably learned from such missteps. The dealer
rollout and new ad push has lifted sales to 4,003 in May 2012
from 1,759 a year ago.
Such progress is promising for Alfa Romeo enthusiasts, but
the question remains - can the company successfully compete in
the United States?
"Yes, but it can't happen overnight," said Dave Platt, who
has owned Alfa Romeos including the 1974 Spider and the 1994
Alfa Romeo 164L, as well as a Mini, a Saab and a 1967 Corvette
coupe. "Tearing people away from the marques they know and love
could be difficult."