Alfa Romeo, Maserati, and Fiat need help. That is not new. The late Sergio Marchionne, when he was CEO of FCA, lamented these brands were not performing close to the lofty goals he set for them. His successor, FCA CEO Mike Manley, made similar noises today in a call with investors to discuss third-quarter earnings.
The difference is this conference call comes a day after FCA and PSA announced plans to merge. And the brands most likely to be impacted are Alfa Romeo, Maserati, and Fiat.
Manley said he would not elaborate much about the deal that came together quickly because the two companies know each other well. He did say the agreement, which will take a while to formalize, brings together two strong complementary businesses with significant potential for value to be released. And the move is consistent with what Marchionne said in the final years of his life: that mergers are needed for a strong auto industry.
Manley said in his 15 months in the top job, Maserati is better but there is still work to be done. To get the Italian luxury brand back on track, he has changed the leadership and reduced inventory by 7,000 units this year, deciding it was worth a $50 million loss to bring stocks in line. Restructuring of the brand should be complete by the end of the year so it can start making money again in 2020.
The entire product portfolio will be renewed by 2023, and electrification will be a hallmark of the brand. A Ghibli hybrid starts the motor running next year, followed by the first new addition to the lineup: the Alfieri sports car due in late 2020. The coupe will be followed by a convertible in 2021. The Alfieri will be available as a plug-in hybrid or full battery electric car. That will be the pivot point for Maserati to enter the electric world; from then on all future Maseratis will have a full battery electric option.
That includes an electric Levante crossover to take on Tesla, as well as a plug-in hybrid. And there will be a smaller SUV that slots below the Levante. The Quattroporte will also get motors and batteries.
Manley may have inherited a weak Maserati brand, but with restructuring of leadership and inventory, and a new lineup in the works, “I’m excited by plans for Maserati,” he said.
The other disappointment is Alfa Romeo which will see its wings clipped. “In the near term, the new portfolio for the brand is significantly scaled back with a corresponding reduction in capital spending,” Manley said.
It means continuation of the Giulia and Stelvio and the addition of two more crossovers. The Alfa Romeo Tonale compact crossover concept from the 2019 Geneva auto show will be on display this month at the L.A. auto show. This gorgeous concept looks production ready and would be a welcome addition to the lineup. But previous plans for more sedans and sports cars have been shelved.
As FCA and PSA look at potential synergies, the new automaker will choose the best platforms for use going forward. The Giorgio rear-wheel-drive platform has done a good job underpinning the Alfa Romeo Giulia and Stelvio, Manley said. It was designed to sustain electrification and the complexity of future infotainment systems. As one of the few rear-drive platforms, there is a good chance it will continue, Manley said.
The Fiat brand will focus on products and regions that were successful in the past. That means emphasis on Europe and on B-segment cars, cutting back on A-segment small vehicles. And no new products are planned at this point. Fiat recently announced it would discontinue production of the 500 and 500e small cars in North America.
Where PSA might affect FCA products is its expertise in smaller electric vehicles. Because FCA has such a high carbon footprint, it buys credits from Tesla to avoid fines for not being in compliance with emissions regulations. That is a practice that will continue for a few more years. Manley said he hopes FCA’s updated lineup, with its plans to introduce electric vehicles for many brands, will help the automaker to meet regulatory compliance on its own in 2021, at least on paper, but that is not guaranteed so Tesla is a hedge. The merger will help even more, Manley said.
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Source: WORLD NEWS
