One consequence of Fiat‘s takeover of Chrysler is the return of Alfa Romeo to North America; this had been expected in 2012, but reports since the 2011 Frankfurt motor show suggest this will not happen until 2013.
Fiat’s US dealers have been promised Alfas, and possibly Lancia models, but for now they have just the Fiat 500. The global economic uncertainty has led Fiat to review its entire product launch programme – models, launch timing and launch geography.
Fiat’s US dealers have been promised Alfas, and possibly Lancias, but for now they have just the Fiat 500.
Press reports suggest the US launch vehicle for Alfa will now be the low-volume, two-seater 4C sports car, but the timing for the MiTo, Giulietta, Giulia, SUVs/crossovers and a replacement for the 166 remain unconfirmed. The longer the delay in returning to the US, the more difficult the challenge will be for Alfa to fulfil Fiat’s ambitions.
And what are Fiat’s ambitions? Some time back, Fiat said it wanted to sell at least 85,000 Alfas in North America, mostly in the US. 80,000+ units may appear small beer, but in a market from which the Alfa brand has been so long absent, this will be a major challenge. Globally, Fiat is targeting 400,000 Alfa sales, although the timescale for this is undefined.
Taking the 2009 and 2010 US market as a guide, 85,000 units would mean selling close to Mercury and Lincoln volumes, and outselling Volvo, Land Rover and Jaguar by some margin. Since most Alfa sales will be cars (the timing for Jeep/Dodge-based SUVs is clouded in more uncertainty), 80,000+ cars would mean almost as many cars as the Chrysler brand sold in the US in 2010, and selling significantly more cars in the US than Cadillac, Acura, Infiniti, Audi, Lincoln, Mitsubishi and Volvo. These established brands’ model mixes are different to the likely Alfa range, but their existing volumes highlight the task facing Alfa.
Alfa’s global sales in 2010 were just over 100,000, so adding 80,000 from the North American market alone is almost akin to doubling current total sales.
Audi, against which Alfa is often positioned, sold just over 101,000 units in the US last year – 70,000 cars and just under 31,500 SUVs; this represented a 23% rise on its 2009 volume – against an overall market increase of 11%. Audi has been present in the US during Alfa’s absence, and even now sells just 101,000 units a year, less than a 1% share. Audi’s US sales growth shows how long it takes to establish even a modest share; in 2006 and 2007, Audi sold just over 90,000 units, but a decade earlier it sold less than half of this, with just 32,500 in 1996 and 41,500 in 1997. While the market for premium, sporty European brands may be stronger now than a decade ago, there is no automatic guarantee that the 150 Fiat dealers with the Alfa franchise will quickly achieve the average of around 560 Alfa sales per year which will be required.
Taking Audi as a guide, Alfa achieving 85,000 units in North America is unlikely to happen quickly; remember too that Audi’s sales growth took place in a rising market. Can Alfa really do the same in current market conditions? Moreover, Alfa’s global sales in 2010 were just over 100,000, so adding 80,000 from the North American market alone is almost akin to doubling current total sales. Ambitious? Certainly. Achievable? Possibly; but achieving the possible will almost certainly take longer than Fiat might like.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Ian Henry is a director of AutoAnalysis, an independent automotive research and consulting company based in London.
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