So we have all seen the official images of the new replacement for the Alfa 147 - the Alfa Romeo Giulietta , or formerly known as Milano. The Milano name was dropped at the last minute following the controversial relocation of Alfa's operations in the city of Milan to Turin. In effect, parent company Fiat S.p.A is severing all ties with the historical city of Milan, where Alfa Romeo was founded 99 years ago. According to Fiat, the move is supposed to “increase efficiency and save costs.”
Yesterday I received a news ticker on another Alfa Romeo related news - on Fiat's CEO Sergio Marchionne announcement regarding the future of Alfa Romeo. Details can be found here but in short, Marchionne have lost patience in waiting for the turn around of money losing Alfa Romeo. Marchionne's ultimatum for Alfa is either :
1. Replacing the 159 with a D-segment sedan and the 166 with an E-segment sedan built in North America on Chrysler platforms, but unique to Alfa and sold by Alfa worldwide.
2. Freezing investment in the brand after the 147 hatchback is replaced by the Giulietta. This means that the 166 will not be replaced, leaving the brand with the Giulietta and the MiTo, Alfa's first small car, as its only fresh models. The rest of the Alfa range - the 159, the Brera coupe, the Spider and the GT coupe will continue to be sold.
Option no.2 sounds like a very childish threat to Alfa Romeo, and from a business point of view I certainly cannot see any strong rationale behind it. How would freezing investment solve Alfa's problem? The previous 156 gave Alfa Romeo a short but much needed sales boost. But the company failed to keep the momentum going. The 147 was a great car but did not quite hit the necessary volume.
The Alfa Romeo brand has a very illustrious history. It was after all the automotive world's Ferrari before Ferrari even existed. Until today, it is still sort of a poor man / young man's Ferrari (or a glorified Fiat, depends on how you see it).
Many car makers would clamber to have the kind of recognition that Alfa Romeo enjoys. The brand may not top sales charts, but almost every consumer, irrespective of how oblivious they are to cars, knows that Alfa Romeo is an Italian car maker. The same can't be said for many up and coming Far Eastern brands from China / Korea / India, who despite their deep pockets, still have a long way to go in building their brand. Throughout the entire thought process of a car buyer in deciding a car purchase, from brand awareness to model awareness to info seeking to consideration and purchase (and also repeat purchase), the name Alfa Romeo will almost always appear in the initial brand awareness stage. But then it rapidly falls out when we move further along the thought process. A ubiquitous model like Corolla in contrast, will hang on quite strongly in each stage.
If Marchionne does not wish to have anything to do with Alfa Romeo anymore he should consider off-loading Alfa to one of those Chinese brands who have billions in guaranteed credits and government loan but with no brands to buy. The Chinese have just lost out on to purchase Saab and Opel (only Geely got lucky with Volvo). Before Alfistis start firing angry emails at me for suggesting that their idolized brand to be Chinese owned, please pause for a moment and think. Would a shrewd Chinese businessman go through the trouble of raising the finances and regulatory approvals, and then allow the brand to be runned down to the ground by cheap low quality Chinese products? Did Tata turn the Jaguar XJ replacement into an Indian interpretation of what a Maharaja should ride in? Didn't SAIC gave a new life to MG-Rover, and now the Chinese designed MG6 is set for production in MG's UK plant in Birmingham? The Americans at GM bought over Saab and look what they did to the brand that pioneered FWD and turbocharging. Same thing with Ford and Volvo. It's not the nationality but the business acumen and leadership that matters.
The problem with Alfa Romeo is never about its brand. There are quality issues but none anymore worse than many other European makes, particularly the French. Older folks will still talk about tin worm and rust on Italian cars but my generation have experienced none of that rubbish. Quality issues alone is not serious enough to drive Alfa Romeo to the ground. Alfa products are fine with very little that is wrong in concept. Alfa Romeo's problem lies with the management of Fiat. Quality issues and mismatch between products vis-a-vis market demands are not problems but merely symptoms of a bigger problem. The root cause of all these symptoms can be traced back to the management of Fiat. But as usual, management takes more credit than it is due but does not take any responsibility for screw ups within their subsidiary or subordinates. Ever heard of the maxim if the learner hasn't learned the teacher hasn't thought?
To be fair, Alfa's problems are not Marchionne's own doing. The problem with Alfa Romeo can be traced back all the way to the 1970s when the company was nationalized by the Italian government. Going under Fiat S.p.A's arms did improve things a little but not enough to stop the brand's gradual slide.
Still, Fiat needs to stop complaining but make up its mind if it still wants to nurture and raise this iconic brand or not. If it's not interested in talking about the future of Alfa, let someone else do the job. Nationality no longer matters, especially when we live in a time when a BMW and Mazda are designed by Dutchmen and Mustang is developed by a Vietnamese and Camaros being engineered by Australians and put together by Canadians.
0 comments:
Post a Comment