It’s probable Frank Sinatra’s 1966 standard, ‘That’s Life’ currently plays on repeat at Trident Towers, given Maserati’s latest reversal of fortune. But how bad is it looking for Modena’s second son?
A year ago, we reported on Maserati’s unexpected sales success with an element of scepticism, but for a brief time it appeared as though CEO, Harald Wester’s plans for the Trident were working. With plans for additional new models including the now ubiquitous SUV, volumes in the region of 75,000 per annum by 2017 looked entirely feasible; catapulting Maserati into the luxury car mainstream while creating a buffer for FCA’s loss of Ferrari revenues. But since spring, reports have hinted at slowing demand which a recent Automotive News piece appears to confirm.
According to last week’s report, production at Maserati’s Grugliasco factory will halt for a six week period over the coming two months, putting around 2,000 production workers on extended leave. Maserati’s global 2015 sales are set to fall by around 25%, making the possibility of reaching its 2016 sales target of 50,000 vehicles per annum that much further beyond reach. According to data supplied by IHS Automotive, Maserati sales will level out at around 26,000 by year’s end and operating profit will shrink 87% to €12m; sobering news for Wester and his FCA chief, who have so far remained tight-lipped on the matter.
The recent economic slowdown in China can be cited as one possible reason for the fall in demand, but the US too has to be a significant factor. The Ghibli model spearheaded US sales gains in the region of over 300% in 2014, but as a model, positioned and priced in the region of Mercedes-Benz’s CLS and BMW’s Gran Coupe 6-Series, Maserati is operating in perhaps the most fickle area of the auto market, as anyone with access to car sales data will attest. An observation by the way, backed up by auto analysts. Wester now faces a twin-pronged vista of falling sales, and a growing stockpile of unsold cars which will require incentives to shift – further denting profitability and the trident’s upmarket reputation.
The question now has to be whether Maserati’s bubble has popped? Following last year’s sales records, there was an expectation that while such growth was unsustainable, it wouldn’t tail off so quickly. Wester now has a mountain to climb and worse still, his delayed new SUV will not be contributing much to it before mid-year at least – assuming it does launch at Geneva. Without Levante, Maserati is missing out on a sector all manufacturers now ignore at their peril. Wester told Autocar last month that without a crossover, “you can look forward to a beautiful death.” One glimmer of light however is Europe, of all places. Sales to September 2015 for both Quattroporte and Ghibli are holding up, which has to be preferable to the sharp falls reported elsewhere.
“This is a year of consolidation for us”, Wester told Car magazine recently, “the luxury car market is not doing well”. He suggested Maserati’s sales target of 50,000 vehicles would now occur a year later than planned, before adding the proviso; if the luxury market recovers.
But it doesn’t end there, Marchionne and Wester’s much-publicised plans for reviving Alfa Romeo also appear to be running into trouble. Maserati was intended to be something of a dry run for Alfa and while it’s possible to say lessons learned here can be applied to the Biscione, this etch-a-sketch approach to marque stewardship risks appearing inept. And meanwhile the clock is ticking.
Few executives know better than Harald Wester just how tough the motor business can be; his being perhaps one of the least enviable jobs in the industry. But for all that, as he places ol’ blue eyes back on the turntable, he undoubtedly mutters to himself, ‘it could be worse – I could still be at Volkswagen…’
Quoted sales figures via left-lane.com