Congratulations Alfa Romeo! You have succeeded in creating a a beautiful sports sedan that not only shares some timeless styling cues from your historic cars, but also manages to fit in in this modern world of crash tests and MPG standards. However, you’re going to need a lot more than sexy curves and a sensual sound.
Big Swings Can Mean Big Misses
First of all, well played on releasing the top-spec car first. Getting the enthusiast crowd and auto-journos hyped up for an M3 fighter, should give you some nice press momentum when it finally comes to launching your higher volume sellers. Though you should realize that gunning for the M3 out of the gate can be both a blessing and a curse.
I’m sure you are well aware that many have tried to de-throne the M3 as the benchmark sport sedan. Some have come close in building something that was “just as good,” but no automaker has ever removed the crown from BMW for a significant amount of time. Therefore, the Quadrifoglio can’t be almost as good, or just as good, it needs to be better. Even if you manage to accomplish that, it is only the beginning of the challenges you will face.
That’s A What?
Everyone is tired of the boring alpha numeric names... 328, TLX, C300, Q50, but you took a different route. You gave your car a real name...Giulia. The only problem is not many people are actually going to know how to say it. I know it’s pronounced “Julia,” but for those people that don’t read the mags/blogs they are going to see one on the street and say, “Hey what is that...a Guh..wee..la?” Remember the Volkswagen Touareg and Phaeton? When part of your marketing material has to be spent on how to say the damn thing, it distracts from the message of the actual car.
Which brings me to the next problem... legacy. Beyond the enthusiast crowd, when you ask the average American buyer about Alfa Romeo, their first thought is probably the roadster that Dustin Hoffman drove in The Graduate. Alfa simply doesn’t have the name recognition, at least not yet. What you need is great product placement. Get the Giulia on the big screen and have moviegoers say, “Look at that...I need one of those!” Audi struggled for years to catch up to Mercedes and BMW, despite making some really competitive cars. So their marketing team put the R8 in a little movie called Iron Man and overnight all the cool people drove Audis.
Play The Numbers Game Carefully
You don’t want to hear this, but the Guila is going to have to be cheaper than the Germans. Alfa is an unfamiliar brand and is aligned with Fiat Chrysler, this is going to have a negative impact on your residual values. If you combine low re-sale with the same MSRP, you are going to get killed in the lease game.
Cadillac made this mistake with their sedan lineup, and Caddy has a much more recognizable name in the American market, though that history comes with some baggage of its own. Regardless of the past, Cadillac makes some pretty solid cars that give the Germans a run for their money in terms of style and luxury. Yet the automaker still has to lob thousands of dollars of discounts to entice buyers to consider them.
Even if you price your car competitively don’t assume it will be an sustained success. In 2013 Jaguar dropped the mic on the sports car world with the F-Type. It was beautiful, it was fast, it sounded amazing. For all intents and purposes it was, pardon the cliche’- “sex on wheels.” The F-Type was also significantly cheaper than the iconic Porsche 911. It had all the makings of a home-run for Jaguar. In 2014 the brand sold 4,112 F-type coupes and convertibles, while Porsche found 10,433 buyers for the 911. Now the Jag is consistently ranked among the “slowest selling” cars month-to-month, according to Cars.com.
Why the disparity between the two? The primary reason is Porsche simply makes more 911s than Jaguar does F-types, the other reason is luxury car buyers tend to buy what they know and status matters. The Porsche name means something, as I mentioned above, the Alfa nameplate doesn’t have the same impact on your average buyer in the American market.
Do That Crossover Right
Sport-sedans are great to get the enthusiasts excited and have your fanbase actually buy or lease one. However, crossovers are king. Young professionals who want a luxury car but aren’t into horsepower figures or lap-times want a crossover. The two hottest selling luxury CUVs are the Mercedes GLA and the BMW X5. Your goal is to aim somewhere in the middle of those price points.
The good news is an Alfa Romeo crossover is coming in 2016, so at least the brand recognizes the importance of playing in that segment. Now they just need to get it right.
Dealer Network
This is one area that too many underdogs in the luxury market underestimate. Hyundai fell into this trap with the Genesis, and realized that you can’t sell a $40k luxury car the same way you sell a $15k compact. Cadillac still for some reason can’t shake loose the perception of being not as “professional” as the German dealers. Lexus on the other hand understood from the start that the dealership experience can make your break your brand. This dedication to top-notch customer service has allowed Lexus to cultivate an incredibly loyal customer base. Of course, part of that loyalty comes from luxury cars that have the reputation of not breaking. That level of quality control isn’t something the Italians have quite mastered yet.
What it really comes down to is you can’t staff an Alfa dealer with the same mindset that wants to sell a Chrysler 200 because they can get the buyer 84 month financing, or a Fiat 500L. If Alfa dealers are lumped together with other Chrysler and Dodge dealerships, many buyers will come in to see the cars only to leave and never come back. Alfa Romeo stores should share the same real-estate with Maserati and Ferrari dealers. Buyers need to think that they are getting the same style and engineering for less.
We are all rooting for you Alfa, but the last thing you want is to come in to this market hot only to follow the same path as your Maserati cousins and have to discount your cars by up to 30 percent just to move some metal.
If you have a question, a tip, or something you would like to to share about car-buying, drop me a line at AutomatchConsulting@gmail.com and be sure to include your Kinja handle.