In four acts: The Alfa Romeo crisis

8:00 a.m., somewhere in the deepest rush hour traffic from Düsseldorf, the almost endlessly long metal avalanches are slowly but surely pushing from intersection to intersection. Traffic is unreasonable in these minutes, and so the (maybe) only Saab draws my attention this morning. Naturally. A Saab stands out today more than ever than Aero anyway.

Alfa Romeo meets Saab. Snapshot in Essen
Alfa Romeo meets Saab. Snapshot in Essen.

And while I think of Griffin front masks and Ice-Block headlights, there is this other vehicle. Just as rare, and different in its own way. It is an Alfa Romeo Giulia, a rarely seen guest on German roads as I will learn later. Admittedly, the Italian doesn't let go of me completely, he somehow appeals to me and I spend the rest of the day thinking about my morning discovery. I do a little research and want to know more about the sporty sedan from Turin. And I open an unexpected door.

Act 1: sales figures like Saab

3.450 pieces. This is how high (or also low) Alfa Romeo's sales figure in Germany reads. Terrifying, isn't it? And it does not mean the figures for the current quarter. It has been the approvals since January 1.1.2019st, 0,1. Alfa can claim almost 29.000% of new German registrations. The general rule is: sales in Europe are crumbling. Huge indeed! Just under XNUMX units were sold in the current financial year, a number that applies to all of Europe (!)

Even Lancia, the long-abandoned Fiat Chrysler corporation, sold more vehicles than Alfa this year - with just one model in a single market. For comparison: Saab was able to sell just under 2009 units in 32.000. And was on the level at which Alfa is now. Alfa will be shown by the group's bottom light, which is practically already handled. The Lancia compact car brings together more sales than Giulia and Stelvio. Compared to 2018, Giulia sales dropped by more than 42%, those of Stelvio by "only" 20%.

And in times when SUVs are always setting new sales records. Alfa Romeo lags behind in all countries and in the world's largest markets - America and China - you play a more than subordinate role. The group absorbs negative business such as that of Alfa Romeo with its North American business. The increased demand for jeeps, pick-ups and SUVs hide the tragedy on the European market.

Act 2: Following the German standard

Alfa Romeo is not only lacking in sales, it is also clearly lagging behind the competition in Italy with the new car standard. What was still celebrated by the company's own brand fans for the introduction of Giulia and Stelvio turned out to be a dangerous balancing act for Alfa if you do not want to scare off the "Alfisti" but absolutely have to generate sales figures. Without the electrical helpers like the predictive distance radar - which can follow the vehicle in front in a traffic jam - the steering assistant or the traffic sign recognition, it is difficult in Italy if you want to poach in the customer segments of BMW and Mercedes. The assistance systems mentioned have been standard there for years, even with the 9-5 NG from there, some selected assistance systems for retrofitting at an additional cost. Alfa is now planning to add these as part of the next facelift. Years too late, but at least.

Act 3: The lack of breadth in the portfolio

And this despite the fact that a few years ago an incredible amount of money was put into the in-house platform "Giorgio". The Giulia and the Stelvio emerged from it, the furious concept of the “Tonale” also builds on it. At that time the former were showered with designer prizes, the path seemed to be going uphill. By 2022, seven more models had been announced, including two new sports cars and a small SUV. The electrification of the range with plug-in hybrids and battery drives and the return to the small car segment. Up until the middle of last year, the group management even said that from 2022 Alfa Romeo would sell 400.000 units annually. So the future looked bright.

But in 2019 there is bitter reality. Gone are the long-believed future. Two of the former four models in the model range were discontinued. First, the MiTo was hit. It got out of the safe small car segment, and in the middle of this year the 4C had to believe it. In addition, the aging Giulietta will most likely experience its last model year in 2020. The question of a successor would be justified, but it does not apply.

There is simply none.

And yet you still see yourself in Turin in the premium segment. Accordingly, the prices for your own products are set high, because Giulia & Co are considerably more expensive than their predecessors - brave, given the role of the battered car manufacturer. Of the seven models announced, only the concept of the tonale remains. When he comes is more than open. And the two sports cars actually needed would be typical for Alfa, but here too - none. Likewise, the important further developments in the direction of plug-in hybrids and battery cars in the entire group were cut back more clearly than initially announced. From 2021, the new limit values ​​for the fleet consumption of automobile manufacturers will also apply. Without the “super credits” from the sales of the alternative drives, it will be difficult for a brand like Alfa Romeo to comply with the newly defined limit values.

Act 4: research? Wrong!

Most of all, there is a lack of research. Except for the design, Alfa can draw little attention to itself. When it comes to infotainment, you're just as far behind as when it comes to assistance systems. Both are still too far behind the competition. Although FCA works with a Google subsidiary across the group, for example in the context of autonomous driving, serious results are still pending. Added to this are the interests of the Group's shareholders, who would rather receive profits from the sale of companies as dividends rather than hand over the long-needed millions to their own, under-financed research department.

Rescue is near - the merger with PPE

But not everything has to be negative, like in the drama about Saab you are there. The ever-emerging hope for a long-term rescue. The chairmen of Fiat-Chrysler Automobiles and the Opel parent company PSA had been negotiating a suitable solution for weeks, and a few days ago the relevant news portals finally reported that an agreement had been signed to merge into the fourth largest automobile manufacturer. Finally - light at the end of the tunnel for Fiat-Chrysler. Because with the French on board, the Italians should suddenly find themselves in the fast lane, especially when it comes to battery vehicles.

From years of missing and shying investments to a really solid e-platform - a few signatures, and the tide for the Italian automotive industry could turn quickly. Modern platforms, good design and the most modern security and assistance systems at an affordable price. PSA brings with it what FCA has been missing for years and urgently needs. Nevertheless, the FCA Group - like Opel two years ago - will most likely have to adjust to hard cuts.

It will also have to be seen whether the good sales network in Europe and the hybrid and battery platforms from the PSA shelf can really turn things around. And whether Alfa, Lancia and Chrysler still have a chance at all in the newly created group and will not end up in the museum, may be more open than ever with the merger of the two car giants. The story threatens to repeat itself.

The ingredients for the downfall of a traditional brand have been well known since 2011 at the latest. Weak sales figures, a too small model range and an investment-shy parent company. In addition, shareholders who prefer dividends rather than necessary investments. We now know that Saab suffered from similar problems, even though a broader range of models and pioneering innovations could be demonstrated.

The NG's lightbar was years ahead of automotive design, and hope that Alfa could make a similar coup should be slim. Even if the design of the Tonale brings a breath of fresh air to the SUV scene. So the story threatens to repeat itself. The lack of investment, the sometimes immense deficit to the competition, Alfa Romeo has not bottomed out again for a reason. And that, although one still has to face the hard times.

New limit values, the switch to alternative drives - you will have to hurry in Turin if you don't want the same end as in Trollhättan. The merger with PSA should provide justified hope for improvement. The new alliance on the automotive market certainly has a lot of potential, and new opportunities could arise for Alfa. Whether one will benefit (and may) in Turin remains open. If not, another traditional and individual brand could be doomed by 2021 at the latest. The merger with PSA - it for Alfa Romeo could be the last chance but also the final end.

20 thoughts too "In four acts: The Alfa Romeo crisis"

  • Thank you Jan for the thoughts and insights on the sales figures and details. That the sales figures are so low is of course not good for the group, if you drive one yourself it is almost like a Saab driver. You drive something out of the ordinary with all its advantages and disadvantages.
    As Alfa is doing at the moment, there will probably be nothing left with a rear-wheel driven Giulietta, after the 1 Series has also switched to front-wheel drive.

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  • If the merger with PSA becomes a reality, that could also be the end for Alfa. PSA already has something for athletes with DS and something for individualists with Citroen. It is quite possible that Alfa will be stamped out.

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  • New car brands are emerging and old car brands are disappearing or struggling to survive, exciting times in the automotive industry.
    Does anyone actually know about Borgward?

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    • Borgward is still alive, or is still undead. Contrary to all predictions. Has changed hands. Although there is no plant in Bremen and there is considerable fluctuation at the management levels, ATU has also ended the collaboration, but in December a new SUV was introduced in China.

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  • Thank you for the exciting report from the Italian niche. Yes, the Alfas have become rare, I also noticed. I would not have suspected that the sales figures were so dramatic. A similar slow adieu is looming ..., what a shame. I'm looking forward to the new “giant company” soon. 2 “problem families” should become 1 “super family”! There will be a lot of talking. Hard decisions will be the result.
    Guys, enjoy your Alfas! 🙂 The SAABians do it too ;-).

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  • terrific,

    that the blog does that. Alfa has been a similar eye-catcher to Saab for a long time. Somehow the Mediterranean equivalent. The 4C is like an Italian modern version of the sonnets ...

    For Stelvio and Giulia, delicious engines and transmissions are on the program. Here too there are parallels to the last Saabs. Unfortunately, there are also many negative (no combination) and scary (no significant sales). A pity …

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  • Alfa will probably also go under; pity had 2 old models and was very satisfied. Only sold again because unfortunately I didn't have a garage for the winter.

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  • PSA could also be the last chance for AR. The Giulia was dubbed the last chance for AR "back then" and in addition to a few good things, things went wrong.

    I think their future will be decided just like everyone else. If the electric drive should prevail increasingly (perhaps even autonomous driving), these brands, which stood for your engines or driving characteristics, must find a new definition of what they want to embody.

    For how long does the sales number apply? I had also read about the Lancia paradox last year, but there was already talk of about 27.000 Alfa by the half of the year.

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  • When I was still interested in sports cars, I drove a GTV 6TB and therefore have a certain sympathy for Alfa Romeo. But somehow, once you've landed at Saab, there's no going back. The turbo engines can keep up with sport, the convertibles are family-friendly, which the Spider never was, and with Alfa everything was always more sporty and a lot of plastic inside. Practical cars like station wagons no longer exist, or a design like the 156 series, which was once quite common - the brand was run down even more than Saab has ever been. Whether the soul of these cars is enough for many of the brand's cars to be preserved, as with Saab? We will see.

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  • Dear men, dear Tom

    Thanks for the great reports again and again. It is actually the case that the Alfas become inferior. I can empathize with Herbert Hürsch, I like the brand as well as Saab, with only one tiny difference ...... In our region around Bern I see a lot of different Saab models, which my heart delights, during which the Alfas are barely visible , A pity. Let's hope the best

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  • @ Jan_HH,

    I thought the article was a real Tom until I noticed the author at second reading. Would also be a tough workload for an author alone, which the blog team has already published here at the beginning of the year.

    Great that and how you do it! ! !

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  • With “Alfa” everything is clear, like GM, like SAAB once, they all suffer in “marketing” and customer support. At us GM / Opel, probably the worst support was customer support than other brands (probably only local manufacturers like VAZ / UAZ in those days were worse). And now, when you need to sell such excellent (without exaggeration) models that Alpha has developed over the past 15 years - they are not sold in our country (and at the same time selling in poorer countries, is it strange?). Yes, to prepare and adapt a car for us and not to sell is a very distant and strategic move. Yes, sell 500 Alfa per year (I think you can accelerate to 1000, because our market is not spoiled by original and exclusive cars), but after all, someone needs to do this. But apparently Italians easier to drink wine in a villa in Tuscany than to go to a cold country with their oddities and try to establish sales.

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  • Very interesting contribution! Thanks a lot for this. I really like the "thinking outside the box".
    I have also had a certain sympathy for Alfa for many years - but never had one of my own.
    Last year in France I got a Gulia by chance as a rental car. And I was very happy because it is a really nice car. Red on the outside, beautiful black leather on the inside - they can. Alfa is actually known for the good boxer engines. Unfortunately I got a diesel that was pretty rough - but strong. The chassis hard, but not too hard. You got around corners well.
    But: When operating the infotainment system, I had my first doubts: Is this supposed to be a new car? I felt like I was 10 years back. To pull out hair - totally cumbersome.
    Outside bad gaps on the doors. The rear left door stuck out and didn't fit well with the rest of the body. Either the pressing tools were worn out or something went wrong when adjusting the doors. That would not work for Swedish and German manufacturers.
    I still like Alfa because of the great design. But the details are really not well done. This is not possible in the premium market. And that will also be the reason why you can't get ahead with the sales figures.
    Very bad - could have been great.

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  • Maybe someone can Carlos Tavares make the Saab brand palatable for revival.

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  • Thank you for this great report in an unexpected place. I'm probably one of the only people who has had a long (ten) year relationship with both Saab and Alfa Romeo. For many (also on this page) this marriage is understandably a bit strange; for me it was always consistent; although fundamentally different, there are and there are many similarities and parallels in the vehicles and history.

    Yes, probably and unfortunately the fears about the early demise of Alfa Romeo will come true because the developments in the industry are as they are and due to the abundant management errors at Alfa itself. I prefer to save a blend of PSA-Opel-weissdergeierwas, which has already gone wrong with other brands in the final phase, as you know here in this blog. Sometimes an end with horror is better than an eternal sniff. The upcoming disruptions (BEV, autonomous driving, energy storage, etc.) will take away completely different greats in the industry, and Kodak and Nokia greet you.

    I am glad that I drove the last real Alfa properly again and really enjoyed it: the Alfa Romeo Giulia Quadrifoglio with carbon seats, ceramic brakes, an absolutely heavenly chassis and a glorious engine with 510 PS / 600 Nm from 2.9 liters. Almost 100 km in 000 years, on the racetrack up to 3 km / h, but also as a very pleasant family carriage for the holidays. Always with a big grin on his lips, always stylish and "molto bello". Alfa stop.

    Grazie Alfa! It was a great time and an incredible and great brand story. No other driving machine can and could not deliver this ecstatic level of emotions, least of all the supposedly "perfect" ones.

    My Alfa 4c Spyder and my Saab 900 Cabrio Series 1 must be enough as a reminiscence and reminder of the golden age of the two brands. For everyday life I have made the leap into the future and now drive an American BEV, no, not a Chevy 😉 What can I say: that is also good, even really great and driving is also fun! Somehow comforting ...

    Alfa and Saab will always remain in my heart, and hopefully in the garage!

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  • @ Reto Basciani

    Kodak and Nokia are now more hopeful examples, after all, they still exist, even if they probably imagined their future differently. In any case, I would not want Alfa to continue as an e-scooter or lawnmower manufacturer 🙁.

    In addition, Alfa still has a good name and is still alive as a brand (at least not yet processed), I don't think PSA will throw something away, otherwise there isn't so much anymore, which is why the merger would still make sense (Apart from the US business, but also Alfa should be the most attractive European name next to Chrysler).
    As a Fiat, you can not sell everything sensibly, especially when it comes to the upper middle class. It just has to be filled with life, but PSA apparently has what it takes, how much that will have to do with classic Alfa virtues, is the question.

    There is probably no more space for Alfa and Lancia together, but I can imagine that Alfa DS models will come with Italian styling and a sporty focus.
    For Alfisti, unfortunately, it is only a white thing, but it probably makes sense from a sales point of view ...

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  • Questions after questions ...

    The last 3 articles here for the car year 2020 and Alfa were exciting and informative. Maybe that's why they raise a lot of new questions for me.

    The issue and regulations on emissions from the fleet are complex and politicians sell them to the lobby as an effective declaration of war, as a strategic victory for people and the environment ...

    But the big corporations are surprisingly unimpressed every year by the annual reduction in the permissible CO2 emissions of their cars.

    If you look in brochures, there is hardly a single combustion engine on the market that would reach the values.

    It would take a whole lot of them, which are even well below this average, in order to compensate for the fat boxes in the fleet.

    How exactly does it work? How can you explain the enormous serenity of the companies?

    Although generous, the government grants for the purchase of an EV in 2019 remained just as much a shopkeeper as the subsidized property.

    Despite the generous “Super Credits”, it sounds as if there should be fines for 2020. But nobody seems to fear that?

    So should they be priced in or do you have strategies to avoid them?

    Group-owned car sharing companies offer a way of avoiding this. For example, the cities are paved with the eSmart, regardless of demand and parking space.

    As part of the “Super-Credits”, such a car, even though it only moves 2.000 to 4.000 km a year, compensates for an AMG 6,3 V8 with the 24/7 and just for fun 30.000 km per annum through the city and powerful CO2 is produced. In addition to tire wear, brake pads and accidents ...

    Even more burning than these tires, but I'm interested in the question of what about smaller manufacturers?

    How do or want to compensate for consumption and emissions?

    Are the big players in the industry perhaps so relaxed because the regulations are clearing the market for a large number of smaller competitors in their favor?

    Questions after questions. But very, very stimulating what the blog published within a few days. Thanks again.

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  • @ Herbert Hürsch

    In fact, it is not so easy to keep track of the entire emissions legislation and its impact on manufacturers. The fact is, however, that the mileage of the vehicles sold is not taken into account, presumably with the ulterior motive that they can hardly be influenced by the manufacturers and are considered customer behavior.
    Of course, the emitted exhaust gases still depend very clearly on the distance traveled, which one will try to regulate with the price of CO2 in the future, whether it works, it will be shown.

    But also in terms of the manufacturers, there are many points that were previously unclear to me, e.g. that the 95 g / km CO2 are only an average value, with the exact limit value being calculated individually for each manufacturer based on its fleet weight , or that there is a phase-in for 2020 in which the worst 5% of vehicles sold are not taken into account at all.

    A short compilation can be found here:
    https://www.umweltbundesamt.de/sites/default/files/medien/366/bilder/tabelle_elemente_der_co2-regulierung_fuer_pkw_und_leichte_nutzfahrzeuge_stand_2019_02.png

    In a Heise article (https://m.heise.de/autos/artikel/Der-CO2-Flottengrenzwert-2020-4614480.html?seite=all), who deals with all the implications, all of this is looked at relatively in detail. The most interesting thing for me was the connection with the limit values ​​for 2030 and the possibility of pooling or manufacturer association.

    With regard to the 2030 limit values, it is interesting that a small penalty payment for 2020 could possibly be better for the manufacturers than getting the specifications for 2030 too low.
    Perhaps we will still see promotions at Streetscooter or e.Go this year for which this could possibly be a potential source of money. Sono Motors unfortunately seems to be too late for that.

    It remains to be seen whether customers will move in this game. But as you have already recognized, the large manufacturers can push a not inconsiderable amount of vehicles that are advantageous for them into the market through car sharing fleets, dealer approvals and to a certain extent also through company car conditions.
    But if they should be able to do this over a longer period of time, should the end customer not want to play along, is another question entirely.

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  • 007 / Thank you very much,

    I will follow the links on occasion and go deeper into the topic.
    By the way, 95 g / km corresponds to almost 4,1 l of petrol or 3,6 l of diesel per 100 km. From an environmental point of view, these are apparently very ambitious values ​​- precisely because it should be an average value, which should therefore also be significantly undercut ...

    Such cars, conventional combustion engines, which would consume significantly less to compensate for the 7,2 l or the 10,6 and 14,7 l of other models and their approvals (which will also be plentiful in 2020), have none Manufacturer in the program. On the contrary, there are hardly any cars that would even meet this average (!).
    After all, there are hybrids that do not do this on paper but in practice ...

    Even if I have not yet fully penetrated the mechanisms of regulation, it still seems to me to be a toothless paper tiger without claws, which can be easily soothed with a lot of bureaucratic effort and a lot of whitewashing and arithmetic tricks, which adequately explains the serenity of the industry would ...

    And whitewashing anyway is per se if the electricity mix and the CO2 use for the production are not taken into account, but batteries (which sometimes weigh as much as a whole small car) are still rewarded with super credits.

    However, it is interesting how more or less perfidiously this was solved in detail. For example, the regulations on fleet weight and pooling. Can and should luxury EVs do both at the same time?

    So both bring your Super Credit into the pool, as well as screw the fleet weight to unimagined heights with their 700 kg batteries and take out a few grams more CO2 for the rest of the pool?

    In this construct they are super agents with double zero status (and regardless of collateral damage). Maybe even a 0007 ...

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