CEO to reveal 5-year strategy in early 2014; key addition is a new rwd/awd architecture

Marchionne promises reworked plan for Alfa, entire Fiat Group

CEO to reveal 5-year strategy in early 2014; key addition is a new rwd/awd architecture

Marchionne is 'determined' to reshape the platform used to underpin Alfa Romeo models.
Related Topics

TURIN -- Fiat-Chrysler CEO Sergio Marchionne has promised his fourth revival strategy in nine years for the struggling Alfa Romeo brand.

"We continue to work in a pretty determined fashion in trying to reshape the Alfa Romeo platform and I think we will be in a position to outline more at the end of the first quarter of 2014," Marchionne said.

Alfa's often-delayed return to the U.S. retail market is key to hitting Marchionne's volume projections for the premium brand. The Alfa 4C sports coupe was expected to be on sale in the U.S. by the end of this year, but has been delayed until at least next summer.

Questions also remain over whether the 4C -- and by extension other Alfa imports to follow -- will be retailed through the small Maserati dealership network affiliated with Fiat, or through the Fiat brand network affiliated with Chrysler. Maserati has fewer than 70 dealers in the United States, while the Fiat brand, under Chrysler, has about 210 dealerships.

Alfa's future is a key part of Marchionne's effort to turn around Fiat Group, which on Wednesday lowered its profit target for 2013 because of persistent losses in Europe and slumping sales in Brazil.

Marchionne, during a conference call with analysts Wednesday, said he would reveal a new five-year strategy for Fiat Group and Chrysler next year -- most likely in late April in conjunction with the companies' first-quarter earnings report.

The CEO's comments came after Fiat said its full-year trading profit, or earnings before interest, taxes and one-time gains or costs, will miss an earlier forecast by as much as 13 percent. Fiat forecast full-year trading profit in a range of 3.5 billion euros to 3.8 billion euros. That's below the company's previous range of 4 billion euros to 4.5 billion euros. Third-quarter earnings fell 9 percent to 816 million euros ($1.12 billion).

New underpinnings

For Alfa, the plan focuses on a new rear- and all-wheel-drive architecture that is being developed by a small team of engineers who report directly to Harald Wester, Fiat-Chrysler's chief technical officer as well as CEO at Alfa and Maserati.

Sources say the engineers, who are based at Maserati's headquarters in Modena, Italy, aim to make the architecture flexible enough to be used by the Chrysler and Dodge brands.

Alfa needs the architecture to compete better with German rivals BMW and Mercedes-Benz, which offer rwd and awd cars favored by many driving enthusiasts.

With a global volume of about 102,000 units last year, Alfa sold less than one-tenth as many cars as BMW and Mercedes. The key reasons are: Alfa is product starved – its only models are the MiTo subcompact, Giulietta compact and the low-volume 4C coupe – and it is selling almost exclusively in slumping Europe.

To help reverse this trend, the new architecture is expected to underpin at least four new Alfa models: the Giulia mid-sized sedan and wagon, a large flagship sedan and a mid-sized SUV. The first of these vehicles is due to debut in Europe in late 2015 or early 2016. All Alfa models built on this new architecture also will be sold in the United States, expanding the automaker's oft-delayed bid to gain a foothold in the world's second-largest market.

One source said the architecture could also underpin the replacements for the Chrysler 300 and Dodge Charger large sedans, as well as the future Dodge Challenger coupe.

In the first nine months, Alfa European sales decreased by 30 percent to almost 51,000 units, according to data from industry association ACEA.

Marchionne's original plan for Alfa, revealed in April 2010, called for annual sales of 500,000 units by 2014. Due to several delays in new product launches, Alfa's global target was lowered to 400,000 units in September 2011. In October 2012 the goal was reduced to more than 300,000. The next revision comes next spring.

Alfa said the plan is "top secret" and refused to comment on individual models.

Larry P. Vellequette contributed to this report.

You can reach Luca Ciferri at lciferri@crain.com.


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)




Rocket Fuel