Fiat Group Holds Off on Alfa Romeo Rollout in US

By Brendan Moore

10.27.2008

Fiat Group has decided to push back the re-introduction of Ala Romeo line to the United States market due to poor economic conditions in the US.

The original plan was for Alfas to be sold in the US by 2009, but that was subsequently pushed back to 2010. The new date is 2011.

Fiat Group has also concurrently sharply scaled back its sales forecasts for China for the next two years, but this is related to production issues more than economic ones. And Fiat Group has already adjusted their sales forecasts for their main European market.

Fiat Group Automobiles CEO Sergio Marchionne told a group of auto analysts late last week that “it would be simply crazy investing for returning Alfa in such a depressed U.S. market.”

What this does to the original plans to build or buy an Alfa Romeo production facility in the US is unknown at this point. Alfa could decide to keep going with those plans under the assumption that they’ll be in the US market at some point in the near future and therefore will need production capacity when that happens, or, they could delay that stage as well. One thing is or certain – if Alfa wants to buy a shuttered factory in the U.S., they will have a lot of choices since the American auto manufacturers are abandoning factories in droves. Alfa Romeo should also have an embarrassment of riches to pick from in terms of production workers since there are plenty of laid-off auto workers available around those empty factories.

The delay may also change the initial model mix Alfa had planned on, from both a sales and production perspective, with the Alfa Romeo MiTo possibly moving up to the front of the queue for the US market. The MiTo, a chic and stylish small two-door hatchback, was just named 2009 European Car of the Year. It’s not much of a stretch to see how Alfa would lean towards the MiTo in terms of matching the current American market preferences.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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