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Fiat's Italian sports cars, last sold in U.S. in 1995, need improved strategy
By Mike Ramsey
Bloomberg News
Published on Sunday, Nov 15, 2009
Chrysler Group LLC is cooling to the idea of U.S. assembly and sales of Alfa Romeo sports cars, the premium brand of new parent Fiat SpA, under a five-year business plan that focuses on domestic models.
Chrysler's five-year plan to return to profit and repay government loans assumes delivering 70,000 Alfa Romeos in 2014, out of a global volume of 2.8 million. The sales ''aren't going to be material'' to Chrysler meeting its profit targets, CEO Sergio Marchionne said in the company's business presentation at its Auburn Hills, Mich., headquarters.
As recently as August, the chief of the Alfa Romeo brand said the cars would likely begin arriving in 2011 or 2012. Early discussions in 2008 between Chrysler and Fiat about partnerships revolved around Chrysler providing a North American plant to build Alfa Romeos.
''What we saw from this presentation is that Alfa's presence in the U.S. is by no means guaranteed and that Fiat is going to have to make quite a business case to bring them here,'' said Aaron Bragman, a product analyst with IHS Global Insight Inc. in Troy, Mich.
Alfa Romeo was last sold in volume in the U.S. in 1995 and exited as its sales diminished to a few hundred vehicles. It might be best-known in the U.S. for its Duetto Spider convertible driven by Dustin Hoffman in the 1967 film The Graduate.
In Europe, Alfa Romeo's best-selling car is the subcompact sports car, the MiTo, which sells for about $25,415. As a premium brand, Alfa Romeo leans toward sporty cars rather than plush cruisers. Its most expensive model, the 8C, can be purchased in the U.S. at Maserati dealerships. It costs more than $240,000.
''We were a little disappointed, but this isn't a total surprise,'' said Brewster Thackeray, the president of the Alfa Romeo Owners Club USA, when plans for Alfa Romeo's return weren't announced. ''It could be that they are being cautious.''
Marchionne, who also serves as CEO of industrial conglomerate Fiat, said Chrysler wouldn't sell the Alfa Romeo vehicles without a compelling business plan.
''Unless Alfa comes over here, or someone from that shop, makes a pretty convincing argument to the dealer body about what product portfolio it could offer and how competitive it would be against the benchmark German solutions, Alfa is going to have a tough time,'' he said.
A Fiat spokesman, Richard Gadeselli, declined to comment on when or whether Alfa was going to try to sell vehicles in the U.S.
Alfa Romeo CEO Sergio Cravero said in August that the company was planning to make a new sport-utility vehicle and a larger sedan, both of which could be co-developed with Chrysler. Alfa Romeo isn't profitable and needs to sell about 250,000 cars annually to break even, he said.
Cravero estimated Alfa's sales this year to be 120,000.
Chrysler Group LLC is cooling to the idea of U.S. assembly and sales of Alfa Romeo sports cars, the premium brand of new parent Fiat SpA, under a five-year business plan that focuses on domestic models.
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