Company car buyers may have heard it all before, but new Alfa Romeo CEO Jean-Philippe Imparato has promised an end to distressed sales and a new electrified range of cars in a bid to save the Italian brand once and for all.
Imparato (pictured) is well aware of the brand’s reputation for over-promising and under-delivering, but insists that things will be very different this time.
His 10-year plan, split into two halves, certainly sounds convincing enough. The main point that offers reassurance is Imparato’s claim that the first five years of the plan is “completely locked in, validated and funded”.
Under this plan Alfa Romeo will “launch one car per year in the coming five years, because this brand needs to refuel, to feed the business”.
For a manufacturer that’s currently operating on a two-car range (the Giulia executive saloon and Stelvio SUV), adding new models is a must in order for it to succeed.
Alfa Romeo has already revealed it will start selling a smaller SUV called Tonale next year; this new car is likely to arrive in late spring.
Imparato believes a wider range of cars will appeal to a wider audience particularly a “younger, more female, more family oriented” community.
The Tonale will be Alfa Romeo’s first car to be offered with a plug-in hybrid option. Alfa’s first fully electric car will come in 2024 with a second in 2025. And by 2027, according to Imparato, all models will be “100% electric”.
However, Alfa’s issue has never really been the physical appeal of its cars but the financial position that comes with them, something Imparato is well aware of.
He says: “Before 1950 we were a luxury brand. In the ’70s, ’80s, ’90s and 2000s, we jumped into the generalist world. We’ve had poor quality and a very discounted range. And then one day in 2015, we jumped into the luxury premium segment gain and pricing goes above €53,000. That’s the story of Alfa Romeo over the past 40 years.”
This leaves two questions, according to Imparato. He says “The first is on [product] quality and the second based on the quality of the business.”
Recognising that building cars that don’t have customers causes a problem with residual values, in turn pushing new car monthly payments higher, Imparato is also looking to control this by not setting himself a sales target.
His theory is that if supply matches demand then Alfa Romeos will have better residual values.
He claimed that at the start of 2021 only 38% of cars produced had a customer waiting, and that he had already worked on this to get that figure to 72% now. He added that he is looking to get this figure to 90% by the end of next year.
“How did we do that? Modest pricing on one side, cost control on the other side. Cancelling all the toxic channels and controlling our car flow means what? It means that I do not accept to build cars that are not supported by a final customer order.”
This demand-led approach, which he calls a “pull strategy” means that Alfa Romeo will aim for pricing that’s in line with the equivalent BMW.
To help this aim, Alfa Romeo will also change the way it sells its cars by moving to a fixed-price, no-haggle arrangement. This will be in place by the middle of 2023.
Imparato believes this fixed-price model for vehicle distribution will result in cost savings in the way the cars are sold, which in turn will offset the higher development and production costs of electric cars with increased safety kit and greater connectivity.
Looking at the types of car Alfa Romeo will build in future, Imparato said the brand would operate in the biggest-selling segments of the market, including superminis and supermini-based SUVs.
“I’m absolutely convinced that the premium-ness of the brand is not linked to the size. I’m convinced that if I want to put Alfa Romeo on the safe side in terms of profit for the coming 10 years, the brand must be in the biggest segments of the world.”
For the all-electric cars, he said these must be capable of the fastest charging, rather than having the longest range so that a lighter, more agile, better-driving car is possible.
“I want to be electrically agile, that is completely consistent with the story and the DNA of Alfa Romeo. I would put the emphasis more on fast charging than on range. Because if you are able to charge in 15, 20 minutes, it’s another story. You don’t have to find the way to put too much battery in the car,” he said.
WILL IT WORK?
Only time will tell if Imparato’s plan will work for Alfa Romeo, which even he acknowledges.
“I’m sure in the coming three or four years we will have the discipline plus the product plan where we come back to the reasonable value against our competitors.”
“I can’t tell you, but you will see the results [of not having] any more toxic channels.”