Trouble in poserland

[Tave]

You're judging their "business POV" from the standpoint of their competitors, not the companies themselves.

The alternative to doing what they've done, would have been to not do anything, and let the brands wither and die. Alfa can't afford future R&D just selling 4C's; likewise, Jaguar has needed a better portfolio for decades.

[Tave]

For reference, Jaguar is selling 50% over last year (~3,000 per month for the last couple months versus ~2000 in 2016), with the F-Pace and XE leading the charge.

[SJ_GTI]

I'm not rooting for anything; just assessing the strategy from a business POV. Appealing to enthusiasts and making driver's cars is easy.... I'd love if Porsche gave me a 911R for free, but that's not going to make Porsche money Lotus stuck to its purist guns all the way to its exit out of the US market On the other hand, something like the Miata is good business, as Mazda has built up its brand equity in isolation and for the brand at home, and they've continued to build it without sucking up all the resources in the room. Contrast that with Alfa's situation.....

Plus the whole concept is so meh. Oh look, another 3 series fighter. Granted, this one makes good on the promise, but it's hard to get excited the 20th time.

I think the situation is still salvageable from a business POV though. It's obvious Alfa was never going to generate the volume needed to make this platform viable. But all the LX cars/SUVs move reliable volume, and the LX platform is ancient. Moving to this platform and updating the engines (no more iron blocks for N/A) would make good use of that sunken cost, and give FCA a way forward WRT crash and fuel economy regs going forward. A Charger R/T on this platform for ~35K would be a viable driver's car.

Why is that obvious? The Stelvio will use the same platform and IIRC the platform is planned to be rolled out across other FCA brands for both sedans and SUVs/CUVs.

[12,000 RPM]

You're judging their "business POV" from the standpoint of their competitors, not the companies themselves.

The alternative to doing what they've done, would have been to not do anything, and let the brands wither and die. Alfa can't afford future R&D just selling 4C's; likewise, Jaguar has needed a better portfolio for decades.

Naw, the realm of alternatives is infinite. Not doing anything was just one option (that honestly might not have been so bad). Spreading the platform love is another. Putting those resources into its space/weight inefficient FWD platform is another. FCA had and still has hella options.

The problem with pursuing this option is that its failure will provide more crossover justification fodder. Shareholders, bean counters and product planners will add these cars to Cadillac's Alpha cars and the recently cancelled Lexus GS as examples of why sports sedans are not worth building. Plus for better or worse market tastes are shifting towards crossovers, so at the minimum they have to be in the plan for the plan to be viable. FCA is in the unique position of having RWD sedans and coupes people are still interested in buying.... rather than, or in addition to, dumping resources into the unknown quantity of Alfa, they should leverage the volume they already have.

Again I know the Giulia is an awesome driver's car, but for me personally it's hard to get excited when I know it and the XE are going to tank. It doesn't help that both of them skimp on things that actually drive purchases in this segment- interior quality and rear seat room- but the LX cars have rear seat room by default, and are at price points that forgive low rent interior quality. It's just a thought.

[veeman]

Of course not, residuals on Italian luxury cars are laughably poor. Here you can get yourself a BMW 330i xDrive for $457/mo. for 48 months and $5,000 down. A base Alfa Romeo Giulia with the exact same terms has a $612/mo. payment. (not incl. freight, PDI & sales taxes)

My colleague/friend at work hasn't owned a car in years and didn't need one living in Queens. Him and his wife have a new baby now and he was super psyched about getting a Giulia. He took a bunch of pics of one at the NY autoshow and was stoked about the red interior and quad tailpipes. He wanted to lease because he knows FCA reputation and it's a first generation car.  He couldn't believe how bad the residuals were calculated to be and he'd have to pay $150 more a month than an equivalent Audi.  So he balked.

The only way this car is going to be a success is if they offer a Hyundai type 10 year 100,000 mile powertrain warranty and 5 year 60,000 mile bumper to bumper warranty and aggressively market that. Currently Alpha's is 4 year 50,000 miles for both.  People who are looking to get these cars know they're taking a chance on a company without a great reputation.  Most laying down coin are going to have some mental anguish going in and FCA needs to do something aggressive to allay their concerns.  They're not a domestic so they don't have that Buy American thing going for them, they don't have the H and H of Merc, BMW, Audi, or even Jaguar in the U.S., and they're coming from a company well known to have poor quality control. 

This isn't rocket science why few are buying. 

 

[12,000 RPM]

Why is that obvious? The Stelvio will use the same platform and IIRC the platform is planned to be rolled out across other FCA brands for both sedans and SUVs/CUVs.

Again, we saw what happened with Cadillac, and that was with

- an auto market still growing and profiting from the sales collapse of the recession
- less competiton (no XE, ATS, Giulia, and now the Kia Stinger and possibly Genesis G70)
- a customer base that's receptive to sport sedans
- a brand with an established following/market/reputation

And even with that, Cadillac's best sellers is still its RX350 fighter (on the Epsilon platform so many here claimed could not support a legitimate Cadillac )

Even with the Stelvio, OK, the crossover segment is red hot, but that's not necessarily good for a newcomer. And again it has to do battle with other new comers like the F-Pace, MKC, Macan, NX, that sexy new Range Rover Velar and whatever Genesis has coming. Shit is tight like prom night. The time for new luxury sedans and brands was over a decade ago, and new crossovers was probably 4-7 years ago. Beyond that it's been a real crapshoot, especially at the price points Alfa wants to play in.

[12,000 RPM]

Oh yea, can't forget leasing. Majority of cars in this class are leased. Combined with everything else the shit residuals are a huge ask, even considering how right FCA got everything with the car itself.

[Tave]

Naw, the realm of alternatives is infinite. Not doing anything was just one option (that honestly might not have been so bad). Spreading the platform love is another. Putting those resources into its space/weight inefficient FWD platform is another. FCA had and still has hella options.

The problem with pursuing this option is that its failure will provide more crossover justification fodder. Shareholders, bean counters and product planners will add these cars to Cadillac's Alpha cars and the recently cancelled Lexus GS as examples of why sports sedans are not worth building. Plus for better or worse market tastes are shifting towards crossovers, so at the minimum they have to be in the plan for the plan to be viable. FCA is in the unique position of having RWD sedans and coupes people are still interested in buying.... rather than, or in addition to, dumping resources into the unknown quantity of Alfa, they should leverage the volume they already have.

Again I know the Giulia is an awesome driver's car, but for me personally it's hard to get excited when I know it and the XE are going to tank. It doesn't help that both of them skimp on things that actually drive purchases in this segment- interior quality and rear seat room- but the LX cars have rear seat room by default, and are at price points that forgive low rent interior quality. It's just a thought.

FCA has been seen both its reputation and sales tank as a result of selling rehashed, half-baked bullshit. Alfa in particular has been in a death spiral for years with almost no models to show for it.

If the goal was to keep Alfa alive as the uplevel nameplate, then at a bare minimum, FCA had no choice but to make: 1) a real-person sedan, and 2) an SUV. And that is what they're doing. They're also planning to share the platform amongst Maserati, Dodge, and Jeep. Which makes your specific complaints all the more confusing...

[Tave]

Again, we saw what happened with Cadillac, and that was with

- an auto market still growing and profiting from the sales collapse of the recession
- less competiton (no XE, ATS, Giulia, and now the Kia Stinger and possibly Genesis G70)
- a customer base that's receptive to sport sedans
- a brand with an established following/market/reputation

And even with that, Cadillac's best sellers is still its RX350 fighter (on the Epsilon platform so many here claimed could not support a legitimate Cadillac )

Even with the Stelvio, OK, the crossover segment is red hot, but that's not necessarily good for a newcomer. And again it has to do battle with other new comers like the F-Pace, MKC, Macan, NX, that sexy new Range Rover Velar and whatever Genesis has coming. Shit is tight like prom night. The time for new luxury sedans and brands was over a decade ago, and new crossovers was probably 4-7 years ago. Beyond that it's been a real crapshoot, especially at the price points Alfa wants to play in.

Is it fair to summarize your argument as:

They should have just given up

???

[12,000 RPM]

No, I think my argument could be summarized as "they have better options". For example, the Ghibli is selling at similar volumes at a much higher price point. The Maserati brand has way more equity with consumers than Alfa. I could see the Giulia and Stelvio doing better numbers as Maseratis at higher price points. Plus they already have the start of a decent dealer network, etc.

Yea, I don't know that the Alfa brand was worth resuscitating to be honest. It was in its death throes in Europe and was completely forgotten or maligned in the US. So now they have to fight that, as well as all the market headwinds I mentioned. I get that cars like this have to tug at the heartstrings but there still has to be some kind of realism in the planning.

[r0tor]

The real problem with the Giulia is the terrible ass rear seat room and access to the rear seat.  I had a huge pain the the ass time trying to extract myself from one at the autoshow.

[SJ_GTI]

Speaking of the Stelvio:

http://www.caranddriver.com/reviews/2018-alfa-romeo-stelvio-first-drive-review

Who knows if it will do well in sales. That segment seems to do well for everyone, but it just isn't my cup of tea. If for some reason I had to buy a car in that class I'd probably lower it and just end up with an oversized hatchback. 

[12,000 RPM]

It's gonna be rough without the dealer network. But this will definitely help. Wondering if/when that 5 series fighter is coming and what else they have down the pike. And how they will avoid overlap with Maserati.

[TBR]

It took Maserati a decade and a half before they were moving cars at a decent clip. When you are rebuilding a brand from nothing, which is exactly what Alfa is doing and pretty much what Jaguar and Cadillac are doing, it takes time.

Poor execution (Maserati's gearboxes, CUE, ATS packaging) slow things down even further.

[Tave]

No, I think my argument could be summarized as "they have better options". For example, the Ghibli is selling at similar volumes at a much higher price point. The Maserati brand has way more equity with consumers than Alfa. I could see the Giulia and Stelvio doing better numbers as Maseratis at higher price points. Plus they already have the start of a decent dealer network, etc.

Yea, I don't know that the Alfa brand was worth resuscitating to be honest. It was in its death throes in Europe and was completely forgotten or maligned in the US. So now they have to fight that, as well as all the market headwinds I mentioned. I get that cars like this have to tug at the heartstrings but there still has to be some kind of realism in the planning.

If that similar volume is "low" then sure, otherwise there is a massive gap percentage-wise between the Ghibli and the Giulia. The Giulia is outselling both the Ghibli and the Levante. Maserati wouldn't sell any better offering lesser cars at the same price point.