Alfa Romeo rebirth continues with new sedan
Milan, Italy — The rebirth of Alfa Romeo shifts into high gear Wednesday with the introduction of an all-new luxury midsize sedan in Milan, where the famed Italian brand was founded more than a century ago.
The car — expected to be named the Giulia — is a centerpiece of Fiat Chrysler Automobiles NV's 5 billion euro ($6 billion) plan to grow Alfa Romeo globally and resurrect the brand in North America following a nearly 20-year hiatus. It's the first of eight all-new vehicles expected to be introduced through 2018.
The unveiling will take place at the Alfa Romeo Historical Museum, as officials celebrate the re-opening of the museum and the brand's 105th anniversary. Fiat Chrysler CEO Sergio Marchionne and other executives will attend.
Fiat Chrysler has high hopes for the sedan, which will enter the world's largest luxury segment against German powerhouses Audi, BMW and Mercedes-Benz.
"There's a desire for an alternative to a German premium sedan in the market, and one of the best things Alfa has going for is it's not German," Reid Bigland, head of Alfa Romeo in North America, said during a recent interview at FCA US headquarters in Auburn Hills. "As we benchmark Alfa to the competitive set of Mercedes-Benz, BMW and Audi, you're going to find that Alfa, even with the midsize sedan, is going to be a notch above from a performance standpoint versus those cars."
Alfa Romeo helps fill a hole in the company's North American operations, which include mass-market brands Chrysler, Fiat, Jeep and Ram Truck, as well as uber-luxury Maserati and exotic Ferrari. Until now, there's been no major competition for the German luxury brands.
The introduction of the new sedan also is expected to be somewhat of a rebirth of the brand in Italy, where Alfa Romeo cars can be seen driving throughout the country. It's a historic brand that has seen better days in its home country.
"Milan is the city of Alfa Romeo," said University of Milan professor Giorgio Barba Navaretti, who published a book centered around Fiat Chrysler and the auto industry in Europe and the U.S. "Historically, it's been a very, very appealing brand. That has been diluted and lost, I would say. You can still think of reviving the brand."
Navaretti said transforming Alfa into a "key brand" is "really an important and difficult bet" for the company. The Alfa Romeo logo is actually based off the coat of arms of the Visconti family, an Italian dynasty, and the red cross on a white background represents the flag of Milan.
IHS Automotive senior analyst Stephanie Brinley argues that Alfa Romeo is perceived as more of a "near-luxury brand" rather than a luxury competitor — a reputation the Alfa is driving to change with the influx of new, technologically advanced products.
"If they don't execute it well, it could slow their comeback completely," said Brinley, adding Alfa could find its niche with its Italian styling as a luxury sport brand. "It's not a brand that's coming from zero. It's just been a brand that has been through a long languish for a while."
The midsize sedan follows the introductions of the low-volume 4C Coupe and 4C Spider. The Spider is expected to arrive in U.S. dealerships in August. The mid-engine 4C Coupe has been on sale in the U.S. since December. It combines aggressive Italian styling and carbon-fiber monocoque and aluminum chassis structures with a host of powertrain and technological features.
Bigland said the new sedan — expected to arrive in U.S. showrooms in the first quarter of 2016 — will bring those same characteristics to the midsize segment: "It's important that car carries on with the core pillars of Alfa Romeo of technology, performance and style."
One of Alfa Romeo's largest challenges might not be its competitors, but itself. There is limited supply because of global demand for 4C models, with months-long wait lists in Europe.
Through May, only 295 4Cs were sold in the U.S. While the car isn't meant to be a mass-market vehicle, those are low volumes. At the beginning of the year Bigland expected about 1,000 to be produced this year for the U.S.
"The sales of the 4C are a function of how many we can produce and when we can get them," Bigland said. "The buzz on the car continues to be very positive. We just need more of them."
The majority of North American dealers have received at least one 4C. Those that have received more have only been able to keep them in the showroom for about two weeks. The vehicle's take only 17 days on average to sell.
Golling Alfa Romeo Fiat in Birmingham has sold seven since receiving its first in December, according to director Mike Golling.
"I see nothing but great things coming from the Alfa brand," he said. "If they can replicate what they've done with the 4C and put it into a sedan version, how can't you love that? Also with what we have coming, me as a dealer, I can't wait."
Golling and the other 117 Alfa Romeo certified dealers in North America expect the sedan to not only help bolster sales, but bring Alfa more into the mainstream luxury market. Following the sedan will be a mid-size SUV, which Bigland said is expected to arrive in the U.S. by late 2016.
Industry analysts expect the sedan and SUV to be critical to the brand's product plan through 2018, when Fiat Chrysler expects to sell 400,000 Alfa Romeos globally — five times more than its 2013 sales of 74,000 vehicles.
"This is a foundation for the brand," said Kelley Blue Book senior analyst Karl Brauer. "Anyone can be a niche player, but if you're going to get into tens of thousands of vehicle sales, you have to have a great, compelling product … it will be a real test. It will either validate them or expose them as an unrealistic real-world brand."
The Alfa Romeo name is a combination of the original name, A.L.F.A. (Anonima Lombarda Fabbrica Automobili), and the last name of entrepreneur Nicola Romeo, who took control in 1915.
June 24, 1910: A.L.F.A. founded in Milan.
1911: Company enters racing.
1911-1970s : Alfa wins several world championship races, but success doesn't transfer to sales.
1987: Fiat SpA acquires control of Alfa Romeo, mixes in mainstream products with lackluster results.
1995: Alfa exits North America.
May 2014: Company announces aggressive rollout of eight all-new vehicles by 2018.
December 2014: Alfa 4C arrives in U.S., marking brand's return to North America.
January 2015: Alfa unveils 4C Spider at Detroit auto show.
June 24, 2015: New midsize sedan to be unveiled.
2018: Company expects 400K Alfas to be sold globally.