Alfa Romeo launches Stelvio SUV, but brand building will take time – Detroit Free Press
New SUV offers style, class-leading power and acceleration. Mark Phelan/Detroit Free Press
Alfa Romeo is playing the long game as it looks to win over buyers after a more than two-decade absence in North America.
That’s how Reid Bigland, who heads the brand for Fiat Chrysler Automobiles, sees the reintroduction of the iconic Italian nameplate in the U.S. as it prepares for the critical launch of the Stelvio, a midsize luxury SUV.
Bigland said the automaker has to earn consumer awareness and sales without resorting to marketing gimmicks as it works to establish Alfa Romeo as a brand that can go head-to-head against the likes of Audi, BMW, Lexus, Mercedes-Benz and others. He plans to do it with vehicles that stand out from the crowd with the distinctive flair and design heritage from the storied Italian brand.
“There’s no doubt in my mind that in a year or two years, we’re going to look back and say, ‘Hey, this thing is really working well,’” Bigland said told the Free Press last week as the company gave journalists an up-close look at the 280-horsepower Stelvio in Nashville, Tenn.
The Stelvio is the second major model to arrive in the U.S. as part of the automaker’s plan to relaunch Alfa Romeo. It’s been roughly six months since the highly regarded Giulia sedan began arriving in showrooms, and Alfa’s sales numbers, although lower than its competition, have been increasing.
But the brand has a long way to go. Alfa Romeo sold 919 vehicles last month and more than 2,700 so far this year. That’s a big increase over the 44 vehicles sold in May 2016 and 261 over the first five months of 2016.
But Audi, for example, has sold more than 83,000 vehicles so far this year in the U.S., dwarfing Alfa.
“It’s a brand that has been fundamentally absent from the U.S. for well over 20 years, and there’s still many people that have never heard of Alfa Romeo … and it just takes time, it takes time,” Bigland said. “We’re looking to build great vehicles, great experience and be patient and not get into brand-eroding or vehicle-eroding value practices.”
With the arrival of the Stelvio (models start at $41,995), Alfa Romeo has a vehicle that will be competing in a hot and increasingly crowded compact SUV segment. But for a brand with roots dating to Milan, Italy, in 1910, the biggest hurdle is getting the attention of American consumers.
Lisa Rosenberg, a data analyst for auto research site CarGurus.com, said Alfa Romeo is starting to “chip away” at its rivals in consumer search interest.
“Clearly, there is still a long way for them to go when compared to the likes of Audi and Mercedes-Benz, but they have started to make inroads among their competitors in the first half of the year,” Rosenberg said.
Alfa Romeo represented 0.65% of all new car searches on CarGurus.com in May, a mostly steady increase since its 0.21% search rating the previous May, but the company trailed its high-end rivals, which had numbers ranging from 1% for Jaguar to 4.79% for BMW last month.
Increasing interest in the brand, helped in part by a marketing push that began with three ads during this year’s Super Bowl, is part of what Bigland is emphasizing over sales numbers for now. According to Bigland, if the automaker manages the reintroduction properly, increasing sales should follow.
Bigland sees reasons for optimism. The company says Alfa had 38.5 million YouTube views and 3.5 million visits to its website during the first three months of this year, both representing triple-digit percentage increases over the previous year’s first quarter.
Bigland declined to discuss specific sales targets for Alfa Romeo. He painted that as a way of avoiding the push to simply sell cars. Industry practices that can drive volume but erode the brand are not the answer, he said, highlighting fleet sales as one of those practices he will avoid as he works to relaunch the storied Alfa Romeo brand.
“It’s a matter of picking up that phone right now and saying, ‘Hey Enterprise, I need you to take 3,000 units,’ and Bam! I’ve got 3,000 units right there,” Bigland said. “But that’s not the way to build up a brand for the long term and protect the residual values.”
Excessive incentives are another area to avoid even as the brand tries to stay competitive, Bigland said. Average incentive spending for example, according to Bigland, stands at $2,800 compared to $7,000 for the competition.
Brand building aside, Alfa’s sales numbers can be expected to increase in coming months. Bigland said 700 Stelvios have arrived at the Port of Baltimore and will be shipped to dealers beginning this week.
Stelvios should begin arriving in the Northeast and dealers close to Baltimore and in California by July. Giulias are also “still finding their way” to dealers in the West and Northwest, Bigland said.
Later this year or early next year, a 505-horsepower Quadrifoglio version of the Stelvio — the halo of the model with a projected top speed of 177 m.p.h. — will be added to the stable.
Stephanie Brinley, an analyst for IHS Automotive, said adding an SUV at a time when consumer tastes in the U.S. are clearly shifting away from cars is important even as the introduction of the Giulia sedan sets an image of performance and style for the brand going forward.
Both the Stelvio and Giulia incidentally are built at Alfa’s Cassino, Italy, plant and share the same architecture. It’s too soon, Brinley said, to determine whether the Giulia’s launch has gone well, but the overall speed of Alfa’s reintroduction will not resemble what its vehicles can do.
“They’re probably headed in the right direction, but it’s going to be really slow,” Brinley said, noting that Alfa still has a “big awareness problem.”
One thing that has added uncertainty to whether Alfa is ultimately successful is the delay in the launch of vehicles. Fiat Chrysler CEO Sergio Marchionne had once predicted that the brand would have eight new vehicles by 2018, but the company later backed off that date, saying it would not happen until 2020.
Bigland said the company remains on track for the 2020 goal, but declined to discuss details of the vehicles yet to launch. Those plans are widely expected to include a larger sport sedan and a larger SUV.
The brand has other challenges as its tries to reestablish itself, though — plateauing vehicle sales across the industry and, for the Stelvio, a crowded segment.
For Bigland, the key is to differentiate the brand within the segments in which it competes, such as by creating an SUV in the Stelvio that drives like a sports car.
“I’m confident this will be the fastest SUV in the world, and … there’s only one that can make that claim,” Bigland said.
Contact Eric D. Lawrence: firstname.lastname@example.org. Follow him on Twitter: @_ericdlawrence. Staff writer Brent Snavely contributed to this report.
2018 Alfa Romeo Stelvio and Stelvio Ti
Prices: Starting at $41,995
Engine: 2.0-liter direct injection 4-cylinder turbo with 280 horsepower and 306 pound-feet of torque
Standard all-wheel drive
Fuel economy: 28 m.p.g. highway, 22 m.p.g. city