jpd80 Posted June 22, 2015 Share Posted June 22, 2015 (edited) Sergio to BMW, Audi: Here comes Alfa Luca Ciferri Automotive News-LINKJune 21, 2015 - 12:01 am ET TURIN -- Sergio Marchionne's risky, $6 billion plan to turn Alfa Romeo into a premium brand -- one that can challenge BMW and Audi and end decades of dismal performance -- begins with three new models that will arrive by the end of 2017. Those vehicles -- and five more scheduled to follow by 2018 -- represent a huge undertaking for Fiat Chrysler Automobiles, although one that may finally be gaining traction. FCA is set to show its new Giulia midsize sedan this week and will follow with a midsize SUV and flagship sedan, according to supplier sources involved in the projects. The products are the opening salvos in an effort to overhaul Alfa and increase its global sales from 70,000 vehicles last year to 400,000 by 2018. About 150,000 of the sales goal are expected in North America. The Giulia will debut in Europe early next year and will arrive in U.S. showrooms between April and June, sources say. It will be followed by a midsize SUV in late 2016 and a flagship sedan in 2017. The challenge is enormous, and so are the risks for Marchionne. FCA's CEO is counting on Alfa's relaunch to move the group out of Europe's fiercely competitive mass-volume market and gain a foothold in the fast-growing American luxury market. But there is a long way to go for the brand. Although FCA does not report Alfa Romeo's financial results, analysts say it has been bleeding cash since long before Marchionne joined Fiat 11 years ago. The broad strokes of the relaunch plan were unveiled by Marchionne in May 2014 and include eight new models between 2015 and 2018, not including the low-volume 4C coupe and 4C Spider. In January, Marchionne updated the plan. He said one model will arrive in 2015 and seven between 2016 and 2018, but he didn't say in which order they would appear. The eight are: - The Giulia being previewed this week. - A full-size sedan -- the project 961 flagship. - Two SUVs, project 949 and a second one to come later. - A second midsize model, which sources say may be a large coupe. - A specialty vehicle, expected to be a two-seat roadster. - Two compact models, one of which is expected to replace the Giulietta. But the product cadence will be highly concentrated in the last three years of the five-year plan that ends in 2018, causing some analysts to question whether Alfa Romeo can even get close to its target. IHS Automotive forecasts 2018 sales of about 216,000 cars. An FCA spokesman declined to comment on Alfa's product strategy beyond what the company announced previously. This week, Marchionne will preview the Giulia at the Alfa Romeo museum in Arese, outside Milan, where the carmaker was based from 1963 until Fiat took it over in 1986. The June 24 unveiling falls on the 105th anniversary of the founding of Anonima Lombarda Fabbrica Automobili, which became better known as Alfa Romeo. Delayed a number of times in the past four years, the Giulia is Alfa Romeo's first new volume model since the MiTo subcompact was launched in 2008. The sedan will go against the Audi A4 and BMW 3 series, fitting into a space vacated when Alfa's Europe-only 159 was discontinued in 2011. It will debut in September at the Frankfurt auto show. New architecture FCA plans to begin producing the Giulia in November. Still, two suppliers told Automotive News Europe they fear the start of production could be delayed to year end and that European sales might not start before March. A source said one area in which the Giulia is still falling short is noise, vibration and harshness. The first mule of a heavily disguised Giulia was spotted on June 12 in Italy, with pictures posted to a Facebook page dedicated to the Alfa 952 project. Spy photographers spotted a mule for Alfa's first SUV last month near Modena, where about 800 engineers are working on the Alfa relaunch, a program code-named Giorgio. The midsize SUV, code-named 949, is meant to rival the Audi Q5 and BMW X3. Production is scheduled to start in September 2016. Sales will begin two or three months later in Europe, suppliers said. The Alfa SUV spotted in Modena is based on a Fiat 500L compact minivan, but the wheelbase and overhangs had been lengthened and tracks widened to accommodate all-wheel drive for a much larger vehicle. Alfa also is developing a full-size sedan as the brand's flagship. The sedan, code-named project 961 and set to enter production in mid-2017, will rival the Audi A6 and BMW 5 series. Alfa's last large sedan, the 166, was discontinued in 2007. The three Alfas are based on a new rear-wheel-drive/all-wheel-drive architecture developed by the Giorgio team, which is led by former Ferrari engineer Philippe Krief. Both the midsize and large sedans and the SUV will be built at FCA's Cassino plant near Rome. The company began retooling the plant last summer with an investment close to 800 million euros ($909 million). This month, Cassino began building Giulia units to test the newly installed tooling. To maintain secrecy, workers are required leave their cellphones before entering plant. Battling Audi and BMW means reconnecting the brand with its sporty heritage, and to do that Marchionne is counting on new high-performance engines, including range-topping gasoline and diesel V-6s. The top V-6 gasoline engine will have output of 510 hp, suppliers say. The 3.0-liter direct injection unit, with twin turbochargers, has been re-engineered from the unit Ferrari builds for the Maserati Quattroporte and Ghibli sedans. Big spending The core gasoline engine will be a turbocharged four-cylinder 2.0-liter direct injection unit called Global Medium Engine. Different versions will produce output of 180 hp, 250 hp and 330 hp and will be mated with manual and automatic transmissions with rwd and awd applications. Both gasoline engines deliver high specific output with help from FCA's MultiAir variable valve timing technology. They will be produced in FCA's Termoli plant, which has undergone a 500 million euro ($568 million) retooling. Indeed, the spending has been large-scale on the revival of Alfa Romeo. Soon after joining Fiat in June 2004, Marchionne called Alfa his biggest challenge and No. 1 headache. Eleven years and four relaunch plans later, it's still a huge challenge. When the Giulia and the new SUV reach the market next year, the headache may begin to subside -- or the famed Italian brand could be eating up billions and delivering not Alfa red vehicles but red ink... Edited June 22, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted June 22, 2015 Share Posted June 22, 2015 That"s right! We'll sell ten cars a year now and take .000000000000001 CH of a percent of your sales! Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted June 22, 2015 Share Posted June 22, 2015 If Cadillac can't do this with really great cars, then Alfa isn't going to do this with... Alfas. 1 Quote Link to comment Share on other sites More sharing options...
twintornados Posted June 22, 2015 Share Posted June 22, 2015 If Cadillac can't do this with really great cars Chevys, then Alfa isn't going to do this with... Alfas Fiats. Fixed it... Quote Link to comment Share on other sites More sharing options...
J-150 Posted June 22, 2015 Share Posted June 22, 2015 (edited) You missed the rest of the plan: Alfa competing in the luxury segment. Maserati going Uber luxury to compete against Bentley and Rolls. Lancia goes away to join Plymouth and Mercury. Edited June 22, 2015 by J-150 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted June 22, 2015 Share Posted June 22, 2015 They're not even going to get enough gross profit from these products to pay the interest on the money Marchionne borrowed to do this. Quote Link to comment Share on other sites More sharing options...
banker55 Posted June 22, 2015 Share Posted June 22, 2015 They're not even going to get enough gross profit from these products to pay the interest on the money Marchionne borrowed to do this. FCA Capital Spending 2011 5.528 billion euros Operating cash flow 5.195 billion euros 2012 7.416 billion 6.444 2013 7.440 7.589 2014 8.121 8.169 Ford 2011 $4.293 billion $9.784 billion 2012 $5488 $9.045 2013 $6.597 $10.444 2014 $7.463 $14.507 The company that is three times bigger by market cap is being outspent by a considerable margin. Free Cash Flow is operating cash flow minus capital expenditures, Ford has $7.0 billion, FCA basically nothing left. FCA even outspent GM the last couple of years. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted June 22, 2015 Share Posted June 22, 2015 And FCA has nothing to show for it! I'm going to guess that there are few controls on how that money is spent, and that there is so much waste, fraud & kickbacks in their CapEx that it would blow us away if we knew its full extent. Quote Link to comment Share on other sites More sharing options...
Dave-S Posted June 22, 2015 Share Posted June 22, 2015 I want some of the same stuff Sergio has been smoking or drinking lately. I have never found anything that lets me forget about reality yet so maybe he is onto something. Quote Link to comment Share on other sites More sharing options...
papilgee4evaeva Posted June 22, 2015 Share Posted June 22, 2015 If no one has said it (and I think they have), I'll say it. Sergio Marchionne is making Ferdinand Piech look wise. 1 Quote Link to comment Share on other sites More sharing options...
bzcat Posted June 22, 2015 Share Posted June 22, 2015 The $6 billion wasted on Alfa is going to go down in history as one of the worst investments. From a shareholder return perspective, that $6 billion would pay much more if invested in expanding Jeep and Maserati product portfolio. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted June 23, 2015 Author Share Posted June 23, 2015 (edited) The $6 billion wasted on Alfa is going to go down in history as one of the worst investments. From a shareholder return perspective, that $6 billion would pay much more if invested in expanding Jeep and Maserati product portfolio. The really sad part is the Chrysler-Dodge-Jeep-Ram faithful are swallowing the "trickle down" development malarky that somehow, all that Money given to Fiats crippled Euro brands will deliver shared vehicles for FCA. Don't buy this tripe for one minute, FCA will be lucky to see scraps from the table.. Edited June 23, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
Anthony Posted June 23, 2015 Share Posted June 23, 2015 (edited) The really sad part is the Chrysler-Dodge-Jeep-Ram faithful are swallowing the "trickle down" development malarky that somehow, all that Money given to Fiats crippled Euro brands will deliver shared vehicles for FCA. Don't buy this tripe for one minute, FCA will be lucky to see scraps from the table.. You obviously don't read the Allpar forums do you? Edited June 23, 2015 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
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