FCA To Launch Alfa Romeo In China But Will They Last This Time? – Forbes

Posted: Monday, December 05, 2016

Alfa Romeo Giulia sedan (AP Photo/Antonio Calanni)

Fiat Chrysler Automobiles (FCA) has announced it will bring the Alfa Romeo brand to China. Imports are set to start next year with local production planned for the near future.

Alfa Romeo has been in China before. In the early 00’s some models were sold via Fiat dealers but sales were slow and Alfa Romeo pulled out in 2006. It went silent until 2011 when the brand had a big booth at the Guangzhou Auto Show and announced its imminent return.

But that never happened and Alfa stayed away – in typical FCA style, just like when they announced and postponed the arrival of Alfa Romeo into the United States many times over.

Some of the high end models like the 8C and 4C were and are available in China via the gray market, mostly imported from the United States, but that amounts for at most a dozen units a year.

This time it’s going to be different; Alfa Romeo will come and stay. The plan however is rather complicated and bound to create some confusion among buyers.

FCA will start with importing the Giulia Sedan and Stelvio SUV. They will be sold via Maserati dealers. In the meantime Alfa Romeo will set up its own dealer network; their plan is to have 50 dealers ready at the end of next year. When that is done the cooperation with Maserati will end and Alfa Romeo will sell just via its own network.

Further in the future but with no specific date announced, Alfa Romeo will start local production of the Giulia and Stelvio at the Guangzhou Fiat-Chrysler joint venture. This company currently makes the Fiat Viaggio, Fiat Ottimo, Jeep Cherokee, Jeep Liberty, and will soon add the Jeep Compass.

Alfa Romeo Stelvio (AP Photo/Jae C. Hong)

Good plan or a bad plan? It seems FCA is in too much of a hurry. The Giulia and Stelvio will be slapped with a 25% import tax, and that will hurt sales and profitability. Selling them via the Maserati network isn’t a very good idea either. Maserati only has a handful of dealers and it gives consumers the wrong message about the segment where Alfa Romeo operates. For all its coveted history Alfa Romeo is a mass market brand whereas Maserati is high to top end.

Having their own dealer network would help a lot, but opening fifty dealers in just one year seems almost impossible. And even if they somehow manage that, 50 is not much compared to the several hundred dealers that competitors like Audi and BMW have.

Making cars locally will help more. The import tax will be gone and the cars can be tweaked for local tastes. But when production will start is still unknown. Couple all this with the fact that the Alfa Romeo brand is relatively unknown in China and it becomes clear that it is going to be a hard sell again: bad plan.

FCA would be wiser to set up local production and a solid dealer network first, and then launch Alfa Romeo with a massive get-to-know marketing campaign. The plan as it stands now is too half-baked; it will estrange buyers from Alfa Romeo instead of attracting them.

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