86 retailers are 1st of 3 waves to get 300 U.S., Canadian franchises

New Alfa dealers, lots of orders

86 retailers are 1st of 3 waves to get 300 U.S., Canadian franchises

The 4C coupe will be the first new Alfa Romeo sold in the United States since 1995.
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DETROIT -- Newly minted Alfa Romeo dealerships in the United States and Canada are about to receive their first cars.

Many of the vehicles are already spoken for.

Dealers who were granted Alfa Romeo franchises last week are holding scores of cash deposits for the 4C coupe, the first new Alfa Romeo sold in the United States since 1995.

"We've already got deposits on eight of those 4C coupes," said Jim Benson, a longtime Chrysler Group dealer in Greer, S.C. His Fiat dealership was awarded one of 86 Alfa franchises last week. "Alfa Romeo has a lot of followers out there."

The deposits were placed as long as two years ago, dealers said. They conclude that demand should be strong when Alfa finally returns to U.S. showrooms.

Automotive News spoke last week with five of the Alfa franchise recipients. All said they were holding customer deposits of hundreds or thousands of dollars for yet-to-be delivered 4Cs.

Grady: Dealers are chosen on performance.

Peter Grady, head of network development for Chrysler Group, said the automaker plans to award two more waves of Alfa Romeo franchises to dealers in the United States and Canada. 

One wave will come in the fourth quarter and the other in the first quarter of 2015. In five years, there will be about 300 Alfa Romeo stores in the two countries. 

"It's all based on performance," Grady said. "They're judged based on sales performance, customer advocacy and service advocacy." 

Chrysler broadly defines advocacy as whether a consumer would recommend a sales or service transaction with the dealership to someone else. 

All but three of the initial 86 North American franchises were awarded to Fiat franchisees. Three were given to Maserati franchise holders in California, Maryland and Wisconsin. Grady said more Fiat dealers will be awarded Alfa franchises. 

"As the Fiat dealers perform, they'll be included as we expand the network. We're approaching it as if we really do have one chance to launch this in the marketplace, so we have to go at it very strong," Grady said. 

Dealers receiving Alfa franchises will be asked to pay for tools and signs but won't be charged for the franchise, Grady said. For the most part, dealers will be able to sell Alfa Romeos from their existing stores at least until Alfa Romeo's new product line comes to North America. That is expected beginning in 2016, Grady said. 

Getting units to sell may be a problem for several years. Grady said the brand plans to bring only between 1,000 and 1,200 Alfa Romeo 4Cs to North America annually. 

A mid-sized sedan based on the brand's new Giorgio architecture is expected to begin production in late 2015, debut in Europe in mid-2016 and arrive in the United States in late 2016. 

Seven other Alfa vehicles, all unidentified in the brand's five-year global product plan, are set to appear between 2016 and 2018, brand head Harald Wester said in May. 

Grady said the 4C "is a specialty car, and where you have a specialty car, you start to see concentrations in the West Coast, Southeast and Northeast." 

"That's where the [market] is for that car," he said. "But it doesn't stop dealers from outperforming their market." 

Dealers in the first wave are making last-minute preparations for the 4C -- which is expected this summer -- and long-term plans for their new franchise. 

Rick Case, owner of Rick Case Fiat in Davie, Fla., initially plans to retail the 4C out of his Fiat store. "But we'll be building a new dealership for Alfa Romeo and Maserati, a much bigger dealership. We expect it to be done before the end of the year. 

"We have a lot of orders, 28 orders already," for the 4C, he said. "Some have been waiting for two years." 

Some Fiat dealers have struggled with only two nameplates to sell. They look to Alfa to broaden their product mix and boost revenue. 

"I hope with a fuller lineup of Fiats and a complete line of Alfas, maybe in a couple years we'll have a real store to be talking about," said Ralph Mahalak Jr., who owns Fiat of Winter Haven in Florida. 

"The products that they have are cool. They're just not wide enough. It's like if you made me a Dodge Dart/Jeep Patriot-only store. Those are good products, but that would be a little bit of a challenge, too." 

John Yark, owner of Yark Fiat in Toledo, Ohio, said that adding Alfa won't immediately boost his dealership's bottom line. 

"It's a long play. When you look at the volumes we're doing with Chrysler-Jeep-Dodge-Ram products, it's not going to be a volume play," Yark said. "But who knows? We started out selling Oldsmobiles originally, so we know that things can change over time."

Dealers chosen



You can reach Larry P. Vellequette at lvellequette@crain.com.


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