If the Alfa Romeo’s new Stelvio SUV doesn’t get traction with buyers, Fiat Chrysler Automobiles’ whole strategy is in trouble.
The Stelvio is the centerpiece of a $5-billion investment program to develop new vehicles for sale around the world, not just by Alfa, but Maserati and potentially Chrysler and Dodge.
Fiat Chrysler Chief Executive Officer Sergio Marchionne bet the automaker’s future on Alfa when he postponed investment and new models from the company’s volume brands in favor of the ambitious global expansion plan for the brand and to develop the Giorgio, GMET4 and the Stelvio/Giulia assembly plant in Cassino, Italy.
The Stelvio showcases a new family of engines Fiat Chrysler’s American and Italian engineering teams developed together. The 280-horsepower turbo in the Stelvio and its sibling sport sedan, the Giulia, use the top version of the engine, but Fiat Chrysler’s mainstream Chrysler, Dodge, Fiat and Jeep brands desperately need a new generation of four-cylinder engines to compete.
There’s no plan at the moment for North American production of either the Giorgio architecture that underpins the Giulia and Stelvio or the engine, which is code-named GMET4 – short for global midsize engine, turbocharged four-cylinder.
First, the Stelvio must win over US luxury buyers. The Giulia has established itself as one of the best sport sedans you can buy, but sedan sales are falling as SUVs surge.
Sedan sales to account for 50 percent
The Stelvio is Alfa’s best chance to rake in big bucks, although Alfa officially said it expects North American sales of the SUV and sedan to split 50/50.
Alfa expects North America and China, two markets where it has a very low profile, to each account for 30 percent of global sales. Europe, where the brand has 900 dealers, should deliver 40 percent of sales. Alfa currently has 75 dealers in China and about 170 in the US.
Alfa sold just 73,000 vehicles worldwide in 2016. That’s a pittance compared to leading luxury brands and a far cry from the 400,000 vehicles the automaker originally hoped to be selling on a global basis by 2018 when it set its five-year plan in 2014.
There’s plenty of room to improve, but the competition is fierce and Alfa must overcome a history of fast, beautiful, but unreliable cars.
Giulia’s US sales are sluggish so far — just 2,483 sales through June — according to Autodata. Mercedes-Benz and BMW each sold more than 10 times as many of their Giulia-size cars. Giulia prices start at a competitive $41,995.
The Stelvio needs to start fast and build from there, as Jaguar’s first SUV, the F-Pace did when it hit the market last year. The Stelvio led Alfa to a 50-percent increase in European sales to 8,000 in May.
The automaker won’t reveal its US sales goals for the Stelvio or its annual production goals from its Cassino, Italy, plant but said it will be able to sell all of the SUVs it can produce.
“We’ll work hard to get our fair share from the plant,” Pieter Hogeveen, Alfa Romeo North America director, said at the SUV’s introduction in Nashville. “We are positioning Alfa Romeo as the driver’s alternative” to established luxury SUVs from European and Japanese brands.
Alfa will add four more vehicles between now and the end of 2020 to create a lineup that can compete with Audi, BMW, Jaguar, Lexus, Mercedes and Volvo.
Fiat Chrysler hasn’t revealed any details about those new models, but they’re widely expected to include a larger sport sedan and SUV based on Giorgio. A third, as yet unknown, vehicle is also likely to draw from Giorgio. A roadster to revive the legendary Alfa Spider nameplate is also expected, but that car will be too small to use Giorgio.
“A successor to the Spider or 4C does not lend itself to Giorgio,” Alfa Romeo boss Reid Bigland said. “The architecture certainly has potential and could easily find its way into future Maseratis. It’s a real jewel in FCA’s [Fiat Chrysler] portfolio. It could find its way into other FCA brands.”
That also goes for the global midsize engine family. Smaller displacement or less highly tuned versions of it would help Chrysler, Dodge and Jeep compete with new vehicles from Chevrolet, Ford, Honda, Hyundai and Toyota.
The engineering relationship among Alfa, Maserati and Ferrari remains very strong, despite Fiat Chrysler having spun Ferrari off into a separate company, Bigland said.
That’s because Alfa’s top engineers came from Ferrari, and Ferrari developed the amazingly powerful V6 Alfa will offer in the top Quadrifoglio version of the Stelvio. It goes on sale in early 2018, capping what Fiat Chrysler desperately hopes will be a successful launch year for the Stelvio.
DETROIT FREE PRESS/TNS