Dark Clouds Over Alfa Romeo

2011 Alfa Romeo Giulietta

By Andy Bannister

12.02.2009

Alfa Romeo has released the first pictures of its crucial new mid-range hatchback, but the car’s launch next spring could be overshadowed by continuing doubts about the company’s long-term future.

The Golf-sized five-door will replace the ageing Alfa Romeo 147, and was until recently to be called the Milano. Instead the company has sprung a surprise by reviving the historic Giulietta name, first used by the company on a famous model of the 1950s and then again on a wedge-shaped saloon in the late 1970s.

It will be officially unveiled at the Geneva Auto Show in March next year, by which time Fiat CEO Sergio Marchionne should have announced his plans for the future direction of Alfa Romeo. Recent noises from him haven’t been encouraging.

Marchionne is understandably frustrated by the continuing failure of Alfa Romeo to deliver sales targets or make money.

Alfa Romeo logoLast year, the company sold a dismal 103,000 new cars, compared with 203,000 in 2000. Reports suggest it has lost an estimated $300 million to $600 million every year over the last decade.

Even before that, Alfa Romeo always had a reputation as an automotive money pit. Prior to Fiat acquiring the brand it was run at a loss by the Italian state, which intervened in the 1970s to save the company from collapse and kept it going largely to preserve employment, particularly at the company’s strife-torn Naples plant.

Despite years of commercial failure, Alfa Romeo is the marque everyone wants to love, and an enormous amount of goodwill is felt towards the firm and its charismatic cars by the motoring media. Year after year, praise has been lavished on new models, but this has conspicuously failed to translate into a sales breakthrough.

After the 2008 nadir, sales will undoubtedly be up this year thanks to the launch of the Mito, a small Alfa derived from the Fiat Grande Punto, which is competing in a different market from the company’s previous recent offerings, and has the advantage of a relatively low price.

However, the staple 159 saloon and estate – which are supposed to be Alfa’s competitors for the Alfa Romeo 159BMW 3-series, Mercedes C-class and Audi A4 – continue to perform very poorly in sales terms.

It seems buyers in this class like the look of the Alfa Romeos but are ultimately swayed by their heads, not their hearts, and – despite big strides in the quality of Fiat Group products over this decade – German luxury cars are a far safer investment.

A patchy dealer network outside Italy, low resale values and some remaining reliability glitches haven’t helped Alfa’s overall chances.

Like sister brand Lancia, it seems Alfa Romeo could end up having its DNA diluted by lots of Chrysler involvement in the future.

Marchionne wants Fiat to see a return on its money after all these years, and is considering using the US company’s platforms to replace the 159 and Alfa’s moribund flagship, the 166, with the cars themselves possibly built in North America.

At least, wild early speculation of an effective merger between the Alfa Romeo and Dodge car lines have been ruled out by the Fiat Chief Executive.

As for the new Giulietta, its launch should be the highlight of what will be Alfa Romeo’s centenary year. The new car’s five-door format works well for most European markets, and its looks seem to hang on to some of the elegance of the old 147, whilst achieving a family link to the newer Mito.

It features Alfa’s trademark coupé-like roofline and disguised rear door handles and a new three-dimensional version of the historic shield grille. The back view is less inspiring, looking a bit derivative.

Front-wheel-drive, the car will have familiar Fiat Group power units ranging from a 120hp 1.4-litre petrol to a 170hp 2.0-litre diesel. Later there will be an ultra-sporty 230hp Cloverleaf model.

Alfa Romeo Giulietta - rear viewThe company says rear seat space and luggage capacity are at least as big as the benchmark VW Golf. Alfa will also be hoping to win sales from buyers of small sporting models like the BMW 1-series and Audi A3.

While the new car sounds and looks encouraging enough, for Marchionne the problem is the serious risk of history repeating itself once again. Its predecessor, the 147, was full of promise and got off to the best possible start, being crowned European Car of the Year in 2001. Sales were always well below target, however.

If Alfa Romeo is to progress very far into its second century, therefore, chances are – for better or for worse – it will end up as a very different marque from the one we know today.

COPYRIGHT Autosavant – All Rights Reserved

Author: Andy Bannister

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6 Comments

  1. Alfa Romeo has been sick for sometime and FIAT the parent has been feeding it only enough to keep it alive. I say, pump some money into it, see if they can make it with good product all across the board, and if they can’t, then pull the plug forever.

  2. I think Alfa Romeo’s only good strategy is to move upmarket and stay there. They’ll sell less cars, but be proud and profitable.

  3. citygeek, I agree. Look at the response to the Alfa supercar recently.

  4. I thought the plan was that future Chryslers were going to be based on Alfa platforms, not the other way around. What happened to that? I was looking forward to Alfas return to the U.S. market.

  5. Alfa Romeo could probably make something nice from that Chrysler 300 platform. It’s a servicable RWD platform that can take different displacment engines.

  6. Fiat sees Alfa Romeo as competition for VW in the bottom of their range and an alternative to BMW or Audi at the top. It really hasn’t worked out like that, but that is their vision of Alfa in the market.

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