How Marchionne sees the premium battle

"El Relámpago(LZone) - Humanity First!" (lightningzone)
07/21/2015 at 20:04 • Filed to: None

Also, the fact that he needs two hugely prestigious brands to take on each German brand says a few things about the efficiency of the FCA management, and the R&D and logistical prowess of the group.

DISCUSSION (16)

AM > El Relámpago(LZone) - Humanity First!
07/21/2015 at 20:08

He also thinks Alfa is going to be huge in North America. I’d like that to be true but I’m quite doubtful.

Aya, Almost Has A Cosmo With Toyota Engine Owned by a BMW. > El Relámpago(LZone) - Humanity First!
07/21/2015 at 20:11

Maserati is a bit more premium than the Germans. Yes the car is not that good, but the badge sounds really upmarket, even for normal person.

jkm7680 > El Relámpago(LZone) - Humanity First!
07/21/2015 at 20:14

I agree that Maserati is more premium than the big three, even if for instance the Ghibli is not rated as well as the A6 for instance. I don’t consider Alfa luxury though.

PS9 > Aya, Almost Has A Cosmo With Toyota Engine Owned by a BMW.
07/21/2015 at 20:22

Nah. Here in the states, they spent the last few decades pissing away any cache the brand had in the luxury market with sub-par offerings relative to the competition. The Ghibli did not at all help them shake that impression off of them. Getting a Maser here ultimately means spending as much as you would on something from Germany and getting far less car in the process, which is why dealers are slashing prices on them and offering huge rebates to anyone willing to stop by there and take a look.

TheOnelectronic > PS9
07/21/2015 at 20:39

Nah, it meant spending high-end S-class money and getting a gorgeous GT coupe with an engine that sounded like sex.

Nevermind that the car itself was pretty bland, that was worth it to quite a few people.

Rico > PS9
07/21/2015 at 20:44

It also doesn’t help that the Germans have been BRINGING it for the price of a Maserati GT you can get an S63 Coupe, RS7, M6 all of which are better than the GT and have plenty of options to sound just as good as the GranTurismo.

Rico > AM
07/21/2015 at 20:47

People already have negative ideas on German reliability and Italian cars even more so. I see Kia/Hyundai being more resurgent.

PS9 > AM
07/21/2015 at 20:53

Here’s a Road Map for FCA if they want Alfa to be big in the U.S.

First, figure out what it is you’re trying to sell and who it is you are trying to sell to. “Let’s beat germany!” Isn’t going to be good enough to beat Germany; mearly copying your competitors is asking for a second place result at best. Dodge has a death grip on it’s brand identity and Alfa will need the same if you want it to find success here.

Dig in for the long haul. Significant luxury market share in the US is something you’re going to spend a long time fighting for, and changes do not happen overnight. Ask Infiniti or Cadillac about how hard the market is, and after you’re done with them, ask Kia what happens when you try to sell luxury with a rubbish badge attached to it.

While we’re talking about death grips, it’s time to decide whether or not you want Ferrari to be your only premium brand. Real talk; you’re going to have to sell a little bit of what they have to offer through the other two brands for far less than you’re used to if you want results. Alfa is going to need to turn heads, kick ass and take names if you really want it moving units in this market, and it’s not gonna be able to do that on just hopped up Chrysler parts with Ferrari standing over it’s shoulder going “No, no, no, nope, that’s not happening, no-no-no, no...” Every time an interesting but offensive-to-ferrari option rolls by.

Leave the Ferrari-ing up to Ferrari. That sounds counter-intuitive to what I just wrote, but it’s the truth. Limiting production to spur demand works for Ferrari because it is not a volume brand. Alfa with have to be if you want to challenge the germans globally with it. More units = more marketshare, so build to the demand.

Be fast. Your opponents are already well worn at the game, already have excellence choices on the market, already have significant market share, and already have other competitors lined up with their own good-to-great products ready to take whatever marketshare they lose during a bad turn. Everyone here is fast. So you must be faster . Be light on your feet. Absorb criticism and be prepared to make big expensive changes. Being the alternative isn’t really good enough anymore because we already have alternatives. Good enough isn’t good enough anymore. “Better” is the only thing left worth reaching for.

Chuck 2(O=[][]=O)2 > El Relámpago(LZone) - Humanity First!
07/21/2015 at 21:14

I wish, but no. Alfa could be the every(stylish)man’s car company. And Maser could be the less expensive, yet exclusive Ferrari, but that’s not what’s going on.

Sam > Chuck 2(O=[][]=O)2
07/21/2015 at 21:29

Yup. I wish Alfa was more inclined on bringing the Guiletta to us than trying to sell cars that are worse than the other options for more money.

Party-vi > El Relámpago(LZone) - Humanity First!
07/21/2015 at 21:37

Alfa Romeo is not a luxury brand. They’re like Nissan - premium. Maserati is an exotic, something the Germans are not. I’m guessing he thinks a premium brand and exotic brand will mix to settle as competitors to established luxury marques. Maserati making the Ghibli compete with the 5-Series is like Mercedes making the CLA to steal Honda and Toyota sales; yeah, you’re getting butts into cars, but now your soul is gone.

Dr Emilio Lizardo > Rico
07/21/2015 at 21:40

This is just my personal experience and a very small sample size, but my CLK320 cab needed one transmission repair in 9 years and 110k miles. My wife’s X3 needs some work on he climate control after 10 years and 70k mles. My current S5 cab has needed nothing in 2.5 years/30k miles.

Never owned anything Italian, but my Civic hatchback, Cavalier Z24, and Sebring convertible could all be counted on to do something weird at least once a year.

So I actually associate German luxury cars with reliability.

Rico > Dr Emilio Lizardo
07/21/2015 at 21:52

Hey I believe you! But majority of the general population don’t associate them with reliability.

Chuck 2(O=[][]=O)2 > Sam
07/21/2015 at 22:16

That and the Mito. They could actually compete in a much bigger segment. Then introduce some more stuff once they established their brand again.

BigBlock440 > Party-vi
07/21/2015 at 22:18

Nissan’s premium? When did that happen?

AM > PS9
07/21/2015 at 22:22

- The whole “Let’s beat Germany” theory really doesn’t work as seen with both Cadillac and Infiniti. They’re almost direct copies of the German brands with some personal touches added which only lands 2nd place as you said before. I have a little more hope for Cadillac than I do for Alfa but that is only because I haven’t seen what they have to offer yet. However, it seems Alfa has the idea that they’ll be an enthusiast brand which won’t help them reach the Germans’ level. Their cars will need to be just as luxurious yet somehow more batshit insane at the same time. They really need to take notes from Dodge who in a matter of a couple years went from “shitty American junk” to “holy shit they made a 707hp monster.” People who hate American cars love the Hellcat twins and Alfa needs a car that will create the same effect.

- BMW literally owns the luxury market, especially in North America. It beats out both Mercedes and Audi which means it’s going to be especially difficult for Alfa to bring in a high number of consumers just like it is for Infiniti, Cadillac, Jaguar and Maserati. Alfa simply needs to make better cars than BMW/Merc/Audi and they’ll eventually get a lot of attention. Cadillac is starting to get some attention now, something it didn’t get just a few years ago. You just have to work hard for it.

- They need to establish a hierarchy within FCA. Fiat can be the entry-level brand. Dodge and Lancia can be the mid-level performance oriented brands. Chrysler can be mid-level luxury brand. Maserati can be one step above Chrysler and Alfa can be another step above Maserati with Ferrari at the very top. Jeep and RAM already have a strong market, they simply need refreshes/redesigns to stay in the green. Next thing that FCA needs to do is use less Chrysler parts in the high-end brands, save for those for Chrysler products. It may be a little more expensive this way but it will earn you more merit when it comes to critics. The 4C is essentially a baby Ferrari and it earns high praise because of that. The Quattroporte/Ghibli don’t receive the high praise that they deserve because of the extensive use of Chrysler electronics, switches, controls, etc. which really dampen their image.

- I think I sort of grasp what you are saying. Leave Ferrari way up at the top and keep it a low-volume brand like it is right now. Focus on selling tons of Alfa’s, it will be very profitable that way. That being said, if they plan on making some Alfa models that are super expensive then they have to make sure they don’t build a more “affordable” Ferrari model because people will think of status and say “Why by that Alfa when I can have a Ferrari?”

- I don’t have anything to add to your last point. You covered everything that needed to be covered. “Better” really is the only thing left to aim for, the market is way too competitive and building “Good enough” cars is going to get you swept under the rug and forgotten.