Pushing pricey Alfa Romeo, Maserati and Jeep

TURIN, Italy — In the next five years, Fiat Chrysler will try to sell a lot more vehicles with pricey stickers.

CEO Sergio Marchionne, seeking strong profit margins, plans to lavish money on upscale Alfa Romeo, Maserati and Jeep.

At the same time, spending on new products will be modest for the mass-market Fiat brand.

Marchionne’s vision for Alfa is particularly audacious. Now, the brand is slumbering in Europe and not on sale in the United States.

Fiat Chrysler Automobiles’ five-year business plan presented last week by Marchionne and his team calls for Alfa sales of 150,000 units in the United States by 2018. Last year, Alfa sold 74,000 units worldwide.

Hybrid brands, between volume and premium, “have no legs,” Marchionne told analysts. “The Alfa brand has the DNA to properly compete with German premium automakers.”

The planned investment in Alfa is eye-popping: 5.0 billion euros, or $6.96 billion. The global sales goal for 2018 is 400,000. Marchionne added that Alfa could reach 500,000 in 2019.

Many upscale brands, such as Oldsmobile, Mercury and Fiat’s own Lancia, have faltered. But Marchionne believes Alfa is different.

“If I did not have plants in Italy with spare capacity to fill, I would invest in a greenfield [assembly plant] to revive Alfa,” he said. “It’s a great project.”

An ambitious plan:
Sources in Europe say this is the tentative product plan for Alfa Romeo through 2018. All models are based on a new rear and all-wheel-drive platform called Giorgio.
• Compact car: Two body styles, a sporty four-door and a hatchback, are planned.
• Mid-sized car: The first of Alfa’s new nameplates, the sedan is set to debut in Europe in late 2015 and in the United States in 2016. A sporty wagon will follow.
• Large car: The flagship model project was started in late 2012 as a derivative of the Maserati Ghibli. Last summer, planners decided that Maserati’s underpinnings were too expensive.
• Specialty: This specialty car is likely a rival to BMW’s 6 series.
• Compact/mid-sized crossover: This vehicle will be positioned between the BMW X3 and X5.
• Large SUV: Originally conceived as a derivative of the Jeep Grand Cherokee, Alfa’s rival to the Audi Q7 will be built in Turin, Italy.

Alfa brand chief Harald Wester acknowledged that the Alfa brand had been neglected. He said Alfa lost its way before and after Fiat gained control of it in 1987. For instance, Alfa has sold rebadged versions of the Nissan Pulsar and Fiat Croma.

“Alfa Romeo had completely lost its DNA back in those days,” he said.

He said the brand’s revival is being led by a special team of more than 200 engineers led by two senior heads from Ferrari. The automaker’s other executives are not allowed to interfere with their work, he added.

Meanwhile, Wester said Maserati will continue as a symbol of elegance and class, offering an exciting alternative to the German luxury brands.

Maserati will first add the Levante large SUV late next year. Then, the brand will add a top-of-the-range coupe, expected in 2016, and convertible, 2017,
under the Alfieri nameplate. Product planners want the vehicles to compete with the Porsche 911.

Marchionne’s plan is a blow to the Fiat brand, the automaker’s mainstay for decades. He will mainly add models to the range of the 500 and add two locally produced models to the thin lineup in China.