Alfa pins hopes on RWD sports sedan

Alfa Romeo has released this teaser ahead of the reveal of its new sports sedan on Wednesday.

Alfa Romeo has released this teaser ahead of the reveal of its new sports sedan on Wednesday.

Published Jun 23, 2015

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Milan - Alfa Romeo is preparing to pull the covers off an all-new sports sedan on Wednesday afternoon, the first in a bold new range of products aimed at shifting the iconic brand upstream.

Fiat Chrysler boss Sergio Marchionne is betting on the 105-year-old brand to help the company take on German rivals BMW, Audi and Mercedes-Benz in the high-margin premium car market.

The new mid-sized sedan, poised to replace the 159, will have a six-cylinder engine derived from Ferrari, but created specifically for Alfa Romeo, and the car will draw on Alfa's racing heritage to help it stand out against “boring German rivals,” sources told Reuters.

The new car, meant to compete with BMW's 3 series and Audi's A4 family, will go on sale next year. It will sit on a rear-wheel platform, around 370kW in top models and may carry the “Giulia” name also used by a popular predecessor in the 1960s and 1970s, sources said.

But Marchionne faces an uphill battle to convince drivers that Alfa has shed a reputation for poor quality and service, and to persuade investors he has the formula - and money - to succeed where previous relaunches have failed.

The new Alfa and seven models expected to follow, including an SUV, will have to challenge well-established brands which are leaders in innovation and have the backing of financially strong parent companies.

In contrast, FCA is laden with debt, its margins are under pressure in its North American profit centre where demand appears to be nearing a peak, and it is also battling a steep downturn in another major market, Brazil.

“It's not impossible but it's a tall order and there is no margin for error,” said Giacomo Mori, a managing director at advisory firm AlixPartners in Italy.

“Alfa has to offer all the technology and perks that are a given in those German cars and something else.”

TOO AMBITIOUS?

Fiat bought Alfa in 1986. But several attempts at reviving the brand have stalled, leaving just four models. Only around 72 000 Alfas were sold last year. Marchionne is aiming to lift that to 400 000 by 2018, committing 5 billion euros (R68bn) to the brand - much more than previous turnaround efforts.

Stephanie Brinley, an analyst at forecaster IHS Automotive, said Wednesday's launch alone would not be enough to judge his chances of success. “It will be the full line up and what they do over the next decade to make it into a truly competitive brand that will be decisive,” she said. “It took Audi 10-15 years to come back.”

Critics cite concerns about distribution, especially in the United States, where Alfa has been absent since 1995 but where FCA hopes to sell 150 000 vehicles annually by 2018.

There are doubts too whether FCA has the muscle to compete with its German rivals, which have built up formidable global scale in everything from engines to dealer networks, and are pioneering new technologies such as Internet-connected cars.

Marchionne has said he will “pull the plug” on his plan for Alfa or revisit targets if the first model does not take off.

But he is confident of success, having personally tested the new car on the track and repeatedly sent engineers back to the drawing board over the past three years.

“I was a driver of German makes before I came to Fiat. I used to drive a BMW M5 when I was young and foolish ... With (the new) Alfa we are on par if not better,” he said at a recent car show.

Update: two spy pics of the Giulia surfaced on the web on Tuesday night - CLICK HERE

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