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November 12, 2019 09:37 AM

FCA axes Alfa Romeo’s planned sports cars as it shrinks brand's growth plans

Andrea Malan
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    Alfa Romeo Tonale web.jpg

    MILAN – Fiat Chrysler Automobiles is scaling down growth plans for Alfa Romeo, with two planned Alfa sports cars and a large utility vehicle axed, and the Giuletta hatchback be dropped from its lineup.

    After Alfa discontinued the slow-selling Mito small hatchback and low production 4C coupe and roadster, the brand’s lineup currently comprises three cars – the Giulia midsize sedan, Stelvio midsize crossover and the Giuletta compact hatchback.

    FCA’s revised plan for Alfa means that a 700-plus hp 8C coupe and a 600-plus hp sports sedan that were intended to reboot the brand will not be built.

    The Giulietta, which went on sale in 2010, could be discontinued as soon as next year, according to union sources in Italy.

    Also axed are long wheel-base versions of the Giulia and Stelvio planned for the Chinese market.

    In future Alfa will have four models – the Giulia, the Stelvio, a new compact SUV and a new small SUV (see chart below).

    The Giula and Stelvio will get a mid-cycle freshening in 2021, according to a chart shown to analysts. The compact crossover will launch in 2021 and the small crossover in 2022.

    FCA CEO Mike Manley disclosed the plans to “refocus” Alfa Romeo during the automaker’s third-quarter earnings call with analysts on Oct. 31.

    “I fundamentally believe in the brand but we must make sure that any investments that we make generate an appropriate return,” Manley said.

    Alfa’s product plans have been scaled back to reduce capital spending and make the brand profitable, Manley said.

    FCA does not publish profitably for Alfa, nor any of its brands.

    Manley’s strategy for Alfa Romeo is a reversal of a strategy unveiled in June 2018 to expand the brand’s lineup to seven models by 2022 and to increase annual sales to 400,000 by then.

    Alfa Romeo’s global vehicle sales fell 31 per cent to 67,427 cars from January to September, according to data from market researchers JATO Dynamics.

    Manley said FCA will focus Alfa Romeo in segments and markets where it has been successful. "We will also maintain the brand’s premium position," he said.

    JATO Dynamics’ analyst Felipe Munoz said FCA’s reduced ambition for Alfa Romeo is sensible.

    "Alfa Romeo is struggling with its current product lineup, and the global market situation is deteriorating. It’s better to be realistic," Munoz said.

    He said he expects Alfa’s key markets in future will be Europe, the U.S., China and Japan.

    Europe is Alfa’s biggest market by far, with the brand’s sales in the region falling 42 per cent to 41,464 through September, according to JATO Dynamics. Alfa’s No. 2 market was the U.S. and Canada, with volume down 28 per cent to 13,925. Sales in China doubled to 8,491.

    Electric scale back

    Alfa will add full-electric and hybrid cars – models needed to meet future regulatory emissions reduction targets – but on a smaller scale.

    The small SUV will include a battery-electric version as well as combustion engines, according to FCA’s third-quarter presentation to analysts.

    The compact SUV will have combustion engines and will offer a plug-in hybrid variant. Alfa previewed this model with the Tonale concept unveiled in March at the Geneva auto show.

    No electrified version of the Giulia or Stelvio is so far included in the plan.

    FCA's 2018-2022 plan originally had envisaged that six of Alfa’s future lineup of seven models, including the Giulia and Stelvio, would have plug-in hybrid versions.

    Manley said Alfa’s Giorgio rear-wheel/all-wheel drive platform, which underpins the Giulia and Stelvio, has been given a "significant" upgrade so it can be used for full-electric and plug-in hybrid variants.

    "We have changed the suspension. We have updated all of the electrical architecture in that so that it can take the next-generation infotainment as well as very, very advanced high-tech features,” Manley said.

    The modified Giorgio platform could be used by Maserati, which in September announced production plans for its first hybrid and battery-powered models, including an electric sports car and a new SUV.

    FCA-PSA FUTURE

    It’s not yet clear how Alfa’s future would change after the planned merger of FCA with PSA Group takes place.

    Manley told analysts that a rear-wheel drive platform such as Giorgio could be used by FCA and PSA brands. “If you look across the two companies, there are not many rear-wheel drive platforms. So it's incredibly likely that it would be required going forward,” he said.

    PSA CEO Carlos Tavares, who would be CEO of the merged group, plans to keep all 13 of the brands currently sold by the two automakers. "I see that all these brands, without exception, have one thing in common: they have a fabulous history," Tavares told France’s BFM broadcaster.

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