How I would fix FCA

As an Alfista, the recent news about my beloved brand’s sales performances struck me hard, prompting some reflections about how FCA’s European arm could be ‘fixed‘. 

Junked 1991 Alfa Romeo 164 – Picture by Murilee Martin (c. AutoWeek)

The genuinely awful sales numbers posted by Alfa Romeo lately have once again placed the European side of FCA, best known as the one that burns the revenue generated in North America by Jeeps and trucks, under the spotlight. FCA’s current management seem somewhat unwilling to manage the clay-footed automotive giant created a decade ago, thanks to Sergio Marchionne’s opportunism and dealmaking ability.

The focus now seems to be mostly about maintaining the status quo until the sale of the whole shebang: Needless to say, such a non-strategy can last only so long, and mainly hangs upon Jeep and RAM sales in the USA: turmoil there would send the whole construction crashing down in no time.

The heart of the matter lies with the fact that FCA doesn’t generate nearly enough cash to appropriately fund and nurture the dizzying array of storied brands it owns. I believe it’s high time for someone to take some cold, hard decisions to right the ship and, possibly, let at least some of its European brands thrive.

First, we have Maserati, a name that every enthusiast loves, but that has been attached to compromised products for decades now. The decision to have Maserati competing with the best BMW, Mercedes, and Audi can offer proved misguided, at best. The harsh reality is that FCA can’t muster the technology, the quality, and the support to compete in that arena. Maserati has the recognition for being a proper high-end luxury brand, and it should let be one: a few thousand exotics to die for built at Modena each year, full stop.

Regarding Lancia, I hate to say it, but Sergio was right: I would leave the Ypsilon in production as long as enough Italians will buy it, then goodbye.

Fiat competes (well, it used to) in a mature, oversaturated European market that’s increasingly split between value and premium offerings, with little or no room in the middle. However, if there’s one thing that Fiat does well, it is cheap and cheerful, so I would fund the development of a new Panda and new B and C segment offerings to be built between Poland, Serbia, and Turkey to keep production costs as low as possible. This plan would spell the end of the former Alfasud plant near Naples once the current Panda goes.

Most of the available R&D resources for the European brands would of course be destined to beloved Alfa Romeo, to finally realize the marque’s revival initiated by Marchionne several years ago. Without the associated sales expectations though: Alfa Romeo will never be a volume brand, but it has shown remarkable resilience over the years: people want Alfas, but do not buy them, for two key reasons: lack of dealership support and lack of appealing models.

Let’s face it, the dealer shortage and the sub-par service standards the existing ones give cannot be solved rapidly enough. In Europe, I would imitate Tesla and initiate a direct sales model for Alfa Romeos; this way, the Company would expand its presence directly on premium locations and firmly control the performance of its sales and service staff.

The Giulia and Stelvio would get a refresh and hybrid variants before yesterday, together with the station wagon Giulia, European customers have been asking for since the model’s inception. The world-class Giulia Quadrifoglio would form the base of a stunning two-door, tire-shredder coupé to set the motoring press on fire, while the embarrassingly old Giulietta would be replaced with a hatchback made on the Giulia platform and designed to be pretty rather than practical, as those who wanted a Golf will buy the Golf regardless.

A sexy new coupé and spider Alfa Romeo, based on the still-modern Giulia platform, would be built in the small ex-Bertone Grugliasco factory that now builds the Maserati Ghibli and Quattroporte.

Last but not least, my salary as a CEO: one Euro, all expenses paid, just like the great Lee Iacocca did when he took on the task of saving Chrysler: you just can’t talk factory closures and layoffs with the unions when you get paid millions, right?

Author: Matteo Licata

I've been obsessed with cars for as long as I can remember, and I started drawing them the very moment I could hold a pencil in my hand. Being born in 1980s Turin, it wasn't long before I realized there were people actually drawing cars for a living: I remember I had a Giugiaro Design school diary, sometime in the late 80s, and every month there was a glossy picture of some of his concept cars: Aspid, Asgard, Capsula, Machimoto... From then on, my path was set: I was going to be a "car designer", come hell or high water, and have now been living the dream for about ten years. I've so far published two books about cars, with more to come. Find out more at roadster-life.com

31 thoughts on “How I would fix FCA”

  1. I’m not so sure about your approach for Alfa.
    Alfa needs a broader range of good products, which will be very expensive and I seriously doubt that Alfa ever will make enough money to pay for it.
    They already had a model range able to save the company with 156 and 147 (a Golf alternative that was more pretty than practial). In a short flash in the pan they sold more 156s in Germany alone than their current pan-European sales numbers. They didn’t manage to maintain the momentum because they fell over their own feet respective dealer infrastructure.
    Alfa needs much better dealers and it needs more of them. That will be a problem at least as big as the model range because it involves understanding the problem in the first place.

    In its current form Alfa is a commercial disaster trapped in a vicious circle.
    They simply don’t make the money necessary to create solutions for the reasons of the disaster. Therefore Alfa should either die or be sold to someone with enough money to create Alfas from existing platforms and sell them through an existing good quality dealer network.
    Just as Christopher said a couple of days ago – show me the way to the parallel universe where VAG under Piech bought Alfa. They could have created Alfa as a high-end VAG product between VW and Audi and finally put an end to their permanent troubles with Seat which effectively sits below Skoda. Experiencing established VAG service quality would be a completely new world for any Alfa owner.

  2. Oh dear, this is all so depressing for anyone who loves cars. Although I’m no fan of the Stelvio, it is an entirely class-competitive vehicle for anyone looking for a medium-sized crossover. The Giulia is the best Alfa for a generation, uncompromised by the need to share major parts with other, lesser vehicles, and handsome too. That sales of both have faded so early into their lives is deeply worrying. It has to be a function of a sales and servicing infrastructure that is simply not good enough. People buying any new vehicle, especially a premium one, are also buying into the marque’s ethos and image. We all like to be associated with success. If Alfa Romeo dealerships have a whiff of indifference, decline and resignation to them, of course people will walk past, straight into a German competitor’s slick and stylish (although rather coldly efficient) premises. The real tragedy is the failure of FAR to recognise this and upgrade their dealerships in anticipation of the launch of these vital models. It’s almost certainly too late now.

  3. Not really sure how to fix FCA as it stands today, it seems Fiat’s problems go back decades earlier and should have never grown beyond being a three marque carmaker. Chrysler themselves (along with AMC) is another matter altogether.

    IMO things really went downhill for Fiat when the C2-based Stilo and GM-derived Grande Punto appeared in place of the C1-based Bravo/Brava/Marea and original Punto, surely Fiat themselves could have made a better effort in building further upon their decent showing in the early/mid-1990s with their replacements? Another would be the lack of a direct replacement for the 2-litre Fiat Twin-Cam Turbo by developing a Pratola Serra-derived successor in the early-2000s onwards.

    The ideal would have probably been a combine of Fiat, Maserati (instead of Lancia with Fiat and Citroen swapping marques under an alternate PARDEVI) and Ferrari. Fiat were and arguably still are weak at the upper end of the range between Fiat and Ferrari, which would have probably been better filed by Maserati (that still produces RWD cars under Fiat) instead of Lancia.

    Ideally Lancia would still manage to somehow exist under a surviving Citroen with some ties to Fiat or been acquired by other marque (not sure who else would have been interested in Lancia outside of Fiat), while a still independent Alfa Romeo either collaborates with Citroen (allowing the latter to use both the Alfasud flat-4s and Alfa V6 along with other joint-projects that Lancia could benefit from as a side-effect) or ends up being acquired by Volkswagen if not Ford.

    1. Look under the skin of a Grande Punto and you see that it’s nothing but pure Fiat.
      Its platform was called ‘Punto3-ZFA199 (GM-SCCS)’ and formed the basis for the Opel Corsa D.
      What was GM-derived were the early fuel engines for the Alfa 159 (939) family and what was developed with predominantly GM needs in mind was their platform, something for which Fiat/Alfa payed dearly.

    2. Fair point about the Grande Punto, have to wonder though the extent of GM’s involvement in the Small Platform in the face of rivals it was pretty mediocre along with the Fiat Mini Platform.

      Agree on the GM/Fiat Premium Platform, however it seems Fiat themselves were unfortunately screwing up even without the help of GM if the Stilo/etc is any indication, otherwise it would have been fascinating to see how the 159/Brera/Spider would have been leap forward without GM’s involvement.

      It is known what Fiat/Alfa’s original plan was for replacing/updating the Alfa Romeo V6 before they opted to use the GM High Feature V6 engine? It is claimed the Alfa V6 could have lasted another year in production due to being Euro 4 compliant, yet it seems developing a new V6 along with a Pratola Serra-derived 2-litre Twin-Cam Turbo successor was certainly within the company’s ability.

  4. The real answer to FCA problems lays mainly in one word: RELIABILITY! And of course, GOOD DEALERSHIP MAINTENANCE SERVICE which is interconnected.
    Where I live, one must be out of his mind, or deebly interested in the aesthetic appearance of matters – all linked to a higer than median income – to take the bold step and purchase a new Άλφα!
    Ask any mechanic in town and he will persuade you against such a folly thought.
    Japanese cars are the thoughtful choise, German the status signaling ones, and JLR for the elite who have more money than they know or care!
    BUT if FCA started with just one model for every ABC car size category, that ticked on the forementioned word, then they could start building on their heritage anew!
    Their tifosi public is still there, hanging on and hoping!

  5. Regarding reliability, my copy of the monthly “Which” consumer magazine arrived today, together with its annual car buyers guide, which doesn’t make happy reading for Alfa Romeo. In the table of brand reliability over new to three years, and three to eight years, Alfa came in 30th out of 32 brands. Only Tesla and Land Rover performed worse.

    That said, VW and Mercedes-Benz have nothing to crow about, coming in 24th and 25th respectively. The top four were, predictably enough, all Japanese: Lexus, Suzuki, Toyota and Honda respectively. MINI came in 5th. Fiat came in 13th, a good result, but the 500 is now rated a “Don’t Buy” because of poor safety kit and high emissions.

    1. I assume the Giorgio platform cost a fraction of what VAG, Daimler & BMW spend on their respective competing models. That the Giulia turned out to be such a competitive product is a minor miracle, but, inevitably, something’s gotta give.

    2. From my long standing experience most reliability problems with Alfas are caused by their workshops and unqualified backyard tinkering which regrettably in far too many cases is the same.
      Garages pouring four litres of oil in an engine needing seven-and-a-half of the stuff, omitting/forgetting parts aren’t a good base for reliability.

      A short anecdote might show where the problem could be.
      When I took delivery of my first 156 (the first car of this type on the road in customer’s hands) the sales rep apologised for a big and deep scratch in the boot lid caused by some moron when he ostensibly chiselled off the ‘2.5 V6 24V’ script. From the presentation room we had to drive down a ramp to the road. My wife told me that she found the passenger door’s electric window didn’t work and when we hit the road we lost the engine compartment underbody cladding with an almighty bang. So far for the quality of their pre-delivery inspections.

    3. Imagine if Suzuki made a model with darty, communicative steering and a nimble chassis with an above-average power engine, something like the Peugeot 205 formula. That´d sell like diamonds.
      As for Alfa, I don´t know where to start but I usually end up thinking about Lancia. Today I saw a Thesis on my street and saw a car that still looked impressive, inside and out.
      The problems with the Italian part of FCA are probably down to culture and there is no easy fix for this. The same probably goes for the UK brands. What is going in the German manufacturers is harder to fathom. If I was them I´d dial back complexity and do some deeper thinking on engineering robustness.

  6. The thing that is killing all the smaller volume manufacturers is the incredibly high fixed costs of the engineering, tooling, testing and factory investment for a competitive model.

    Just one small example: someone on eng-tips who works for a Big 3 auto company claims that for a new model, they have approx 70 CAE analysts working for 2 years on 2 supercomputers just on crash simulation and engine vibration. That’s almost 100 million dollars, and all you get is computer models that give you a starting point for building prototypes.

    The fixed cost of crash test design is the same whether you sell 30,000 per year, or 300,000 per year. The development costs of a competitive engine is the same for a thousand a year, or a million engine per year.

    So, the small manufacturers try to share platforms and powertrains and end up with a lack of distinctiveness based on obsolete designs.

    Or they try to go it alone and shoestring a unique platform and powertrain, and end up with an underdeveloped product with all sorts of reliability and durability issues (eg. Giulia)

    One thing I would suggest is to look at this video of the Lotus Elise development. In it they show: the incredibly low tooling cost of aluminum extrusions; low tooling costs of glass fiber bodies, how rear engine makes crash design a lot easier…

    The other thing I would suggest (no doubt to the great ridicule of Bill Malcolm) is to look at body on frame since it is the cheapest way of creating multiple models off the same platform.

    1. The high costs are regrettable but the quantitative payoffs are observable too. I presume the total cost is made up of lumps of 100 million euro bills; any one lump could be cut back but the total result is a generally inferior vehicle or a good vehicle with some notable compromises. Does anyone know if the outer skin of the car has much effect on crash results or is it all about the boxy stuff underneath? And what can be done with calibration of controls to distinguish the cars? I don´t think that enough effort is made on that front or trim. Quite possibly cars on shared platforms could look a lot more distinct than they do but the large conglomates (I am looking at you, VAG) keep the studios on a too-tight leash so they share too much styling character. VAG at present is morass of VAGgy-looking cars. FCA seems not to have that problem.
      Much as I like BOF cars, I can´t see BOF working for small and medium sized cars in the 21st century though in a way Mr Martin can have the last laugh becuase the e-car concept is essentially a BOF, isn´t it? So, maybe it´s not a bad idea if applied to e-vehicles.

    2. “The high costs are regrettable but the quantitative payoffs are observable too. I presume the total cost is made up of lumps of 100 million euro bills; any one lump could be cut back but the total result is a generally inferior vehicle or a good vehicle with some notable compromises ”

      I agree they have to do it. Crash isn’t optional, and neither is engine vibration in the current market.

      My point was that for the low volume producers, that fixed cost is divided over, say, 30K units per year for the Giulia, rather than 300K for the competitive cars for BMW or Mercedes.

      The small guys need to get their fixed cost down where they can, even if the material and assembly costs are higher, eg. aluminum space frame and plastic panels.

      On BOF, I didn’t use to believe this, but it appears that for sub 3000 pound cars, the weight penalty is only about 100 pounds. If that is correct, the weight savings of plastic panels and aluminum space frame cabin structure would more than make up for it.

      On plastic panels for crash, BMW 3 series and 6 series have used plastic front fenders so i don’t think it is essential for crash.

      On BOF and crash, it appears there are some advantages. For example, the frame automatically transmits the crash force and spreads it out back towards the rear of the vehicle. Which is something that the designers work hard to build into their unit body structures. With BOF you get that automatically.

    3. ONe of the most expensive points in development of a new car is its electronic infrastructure. Interconnecting electronic systems for better emission control as well as innumerable comfort and assistance systems takes a lot of effort. Only when costs for electronic infrastructure can be spread across model ranges small volume models become economically viable. A Bentley Phaeton or VW Continental were possible only because they took their infrastructure from Cayenne/Touareg/A8 which sold in numbers sufficiently high to pay for the development costs.

    4. My understanding is that the wiring harness is the second most expensive component in the car, after the engine. So the manufacturing is expensive, as well as the design and specification.

      A lot of it is legally mandated, like emissions, airbags, abs and stability control, cameras. Some is excessively overcomplicated electronic junk that could be jettisoned, and probably marketed as a benefit by small manufacturers.

      In the wake of several easily avoidable collisions in the past couple of years, one reform that the US Navy is undertaking is to remove the touch screens from the bridge and return to analog controls.

      https://www.bbc.com/news/technology-49319450

      Note that this change is overwhelmingly popular with the sailors who have to use these controls.

    5. The iStream doesn’t appear to be a traditional body on frame.

      To me, the main feature of BOF is that the cabin of the car does not carry the weight of the vehicle. That is what gives BOF great platform flexibility. If you change the body, you are not changing the load bearing structure of the vehicle, and only have to worry about maintaining cabin crash protection, and rigidity for noise, etc.

      https://www.cnet.com/roadshow/news/gordon-murray-design-istream-superlight/

  7. Also, regarding Alfa, remember that in europe a great portion of the “prestige” medium / high segment cars are bought using financial products where the calculated depreciation is a major input. This means that sometimes the monthly payment for an Alfa could be higher than for a similar BM/Audi/Merc.

  8. Dystopian thought for the day..
    If car company survival were to be predicted based on current buyer habits worldwide, it would seem that our driving futures will be behind the wheels of something produced by VAG or Toyota…
    Perhaps we should consider those irrational purchases while we still have the choice? High resale value is about to become a thing of the past as ICE powered cars become the Devil’s own favoured means of transportation in the minds of more and more people.
    As enthusiasts we are a dying breed. Many cars are bought by « users » with as much passion for the product as is necessary to make an acceptable compromise between performance (that cannot be exploited), style (of which there is little on offer), and cost (who actually buys a car these days anyway?)
    The age of the car as white goods is upon us.
    Buy an Alfa Romeo while you still have a soul.

  9. “Buy an Alfa Romeo while you still have a soul”. Excellent comment Rob! Your epilogue could really be the new Alfa Romeo campaign slogan!

    1. “Buy an Alfa Romeo while you still can.” might be less emotive, but more apposite, unfortunately.

  10. In the Elise film, the reactions to the to the car’s outer design at its Frankfurt unveiling are quite a surprise, following upon a segment where head designer Julian Thomson drives a 246 Dino, and much discussion over Thomson’s coming to terms with aerodynamic realities, he is depicted as the consummate team player. While the reactions to his work were not universally positive, the Elise is still here. And I think most of us would agree that it still looks decent, if not melting the heart as much as Thomson would have wished for.

    So what do we make of Lorenzo Ramiciotti’s Alfa 4C? Should we ignore it just because it was introduced with the most revolting headlight design ever? There must be a fine story in that detail alone. Trypophobia sufferers, please avert your eyes. ( https://en.wikipedia.org/wiki/Trypophobia )

    Note the 4C’s Dino inspired air intakes, and attractive bare chassis, in carbon fiber no less.

    Isn’t the similarity with the Elise rather striking? Still, among DTW’s erudite authors, resident roadster fans, Boxster boffins, Lotus eaters, and avid Alfisti, none have seen fit to write a single word about the 4C, perhaps it is appropriate to consider doing so now while there is still time for someone, somewhere to buy a new one.

    1. None of the Canadian cars seem to have those pockmarked lights. I don’t think the USA cars did either.

      USA sales for the 4C in 2018 were under 400. Canada sold 50, which is actually proportionally better.

      I think Alfa is a lot like Jaguar, Citroen, Lancia, Saab…. Most car enthusiasts wish them well, but very few want to buy one.

    2. I believe that North American potential customers were spared the hideous lights in favour of this:

      If I recall correctly, the 4C was rated in most road tests as dynamically rather underwhelming, certainly not possessing the sublime handling of the Elise. I think Angel has hit the nail squarely on the head: we all want Alfa Romeo to flourish, but to do so before we consider buying one!

  11. Autocar’s verdict on the 4C, which it rates at just three stars:

    “To finally get the 4C into a location where it’s able to show its best is to finally begin to understand what has, otherwise, been a troubled sports car. If you only ever drove this car on smooth race tracks, we strongly suspect you’d love it. Yes, a Lotus Exige or fast Elise remains marginally more capable and engaging, but really there’s much less in it – under the right conditions – than we’d hitherto expected. In the right place or in small doses, it’s an invigorating sports car. It remains a pity, then, that the 4C is incapable of applying those basic skills where it counts, which is out on the roads where this roadster will surely spend most of its time.”

    1. I guess there’s more chance of a head-on collision with something like a Ford F350 in the US! I wonder if the extra weight and, I assume, suspension recalibration, improved its poise on normal (i.e. imperfect) road surfaces, which was the big bugbear in the car that Autocar tested.

    2. The Elise is pared down but the 4C was crude.
      A couple of years ago a neighbour had one as a courtesy car over a weekend and the only thing that left a permanent impression was the incredible noise of the thing including vulgar farts on downshifts

    3. It was quite amusing to read the press waxing lyrical about the 4C’s design, only a few years after the Lotus Evora (with whom it shares some stylistic details) had received a decidedly lukewarm welcome. Speaking of positive bias…

      Personally, I still can’t get my head around Ramaciotti’s FCA legacy. There isn’t a single great design created under his leadership, but a lot of highly underwhelming ones – and that’s despite his decades of experience at Pininfarina and being praised for his professionalism from many quarters. Obviously, the constraints were significant during those years, but that’s what design is all about – managing constraints & briefs. Shoestring budgets are a fine excuse for shortcomings in a great many areas, but design is about ideas and meticulousness, rather than just money (as proven by the success of Volvo, for example, who have nowhere near the budget of Audi, yet come up with infinitely better design these days).

      For all those reasons, the 4C is a car I fail to view romantically. It’s like reading a recipe that sounds utterly mouthwatering, yet results in a peculiar, rather than delicious meal once it’s been prepared.

    4. Car and Driver actually made the 4C a 10 Best pick. But they noted the terrible ride over anything but perfect pavement (which, since they are in frost-heaved-road Michigan, is about all you get).

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