Fiat chief executive Sergio Marchionne is hoping that a strategy focusing billions of euros in investments in Alfa Romeo will help the brand surge sales and post profits. Sales at the sporty brand this year are expected to dip below 100,000 units for the first time since 1969. Marchionne's new plan for Alfa has the same goal as scheme the one he introduced for its sister company, Fiat's premium subsidiary, Maserati.
Under the plan, Alfa will concentrate on developing premium vehicles for global export from Italy. A successful relaunch of Alfa is vital to Marchionne's broader strategy to return Fiat's auto division to profitability in Europe by 2016. Fiat posted EUR700 million ($928 million) in losses in Europe in 2013 and Alfa has yet to break from losses under Marchionne's lead.
"We continue to work in a pretty determined fashion trying to reshape the Alfa Romeo platform and I think we will be in a position to outline more at the end of the first quarter of 2014," Marchionne said during a conference call with analysts on Oct. 30. He said he would disclose a new five-year strategy for Fiat Group and Chrysler in 2014, most likely in late April when the carmaker unveils its first-quarter earnings report.
"We will give an opportunity to look to the five-year plan based on the thorough assessment" of Alfa Romeo and the carmaker's other brands. Arndt Ellinghorst, senior managing director of International Strategy & Investment described Alfa as a "great brand with no industrial plan."
Ian Fletcher, a senior analyst at IHS Automotive, remarked that Fiat in the past, has tried to address so many projects at once that it seemed it has been unable to provide “Alfa the attention it really needs." According to Fletcher, a new Alfa strategy might fall short in terms of execution since Chrysler and the rest of Fiat's operations in Europe need attention.