FCA's Maserati, Alfa Romeo get much-needed SUVs in 5-year plan

Turin, Italy – Two Italian stallions loaded with horsepower are gearing up to join the global SUV game – long after their competitors already have.

Fiat Chrysler Automobiles NV’s five-year plan for its Maserati and Alfa Romeo brands envisions big moves into the luxury space dominated by their German rivals. It’s a critical move for the Italian-American automaker as its global competitors chase rising prices and rising demand for SUVs of all sizes, often at the expense of traditional sport sedans.  

There's big money in crossovers and SUVs, as competitors as diverse as Germany’s Porsche, Britain’s Jaguar, Japan’s Lexus and Detroit’s Cadillac and Lincoln are discovering with varying success. That's why Maserati and Alfa Romeo both need new offerings if they want to truly play in the global luxury game.

"Having competitive crossovers and SUVs with shorter lifecycles is going to be the difference between a has-been and a sales success in the luxury market for the foreseeable future," said Dave Sullivan, an automotive analyst with AutoPacific. Maserati and Alfa Romeo "have to make the products that people want, and right now those are high seating-position hatchbacks, crossovers and SUVs."

FCA is already using SUVs to grow the Maserati and Alfa Romeo brands in the U.S. Maserati's Levante full-size SUV – assembled according to each buyer's customization at the Mirafiori plant here – boosted the brand's global sales from 30,000 in 2014 when the Ghibli sport sedan was released, to 50,000 units in 2017. The Levante accounted for 53 percent of Maserati's global sales in 2017.

And at Alfa Romeo, the Stelvio compact SUV, which debuted in the 2018 model year, is already nearing the Giulia sedan in U.S. sales this year with 4,538 deliveries to date. The Stelvio captured 2.2 percent of the luxury compact SUV and crossover market in May, according to data provided by Kelley Blue Book.

That's an accomplishment for a new nameplate from a brand that hasn't been in the U.S. since the mid-1990s. But it doesn't come close to leaders like the Mercedes GLC and its predecessor GLK, capturing 12.2 percent of the luxury compact SUV and crossover market. 

"We got into this whole SUV market back in 1997 because in the early '90s we found that one out of every four Mercedes owners in that moment in time had an SUV in the garage next to their Mercedes," said Donna Boland, corporate communications manager for Mercedes-Benz USA. "We were leaving that business on the table, and we thought if our customers are going to buy an SUV, it should be a Mercedes."

By being one of the first to the luxury SUV market in the U.S., she added, Mercedes ends up at the top of shopping lists. Another German competitor, Audi, is learning just how difficult it can be to go up against premium powerhouses like Mercedes and BMW.

"It's an absolute dog fight," said Barry Hoch, director of product planning for Audi of America. "It comes down to the product, and it's a little bit of a Kevin Costner in 'Field of Dreams' thing. You need to have the proper product to get the customers."

FCA's storied Alfa Romeo brand, the history of which is intertwined with the northern Italian city of Milan, will get a compact crossover to sit under the Stelvio – and a full-size SUV – in the next five years.

Alfa Romeo's racing history may not mean much to the American buyer, but the brand's unique and muscular styling appears to resonate with U.S. customers. And that's what the brand needs, analysts and company officials say, to rise above the noise.

"People are very attracted to the Alfas," Sullivan said. "The design of the Giulia turns heads, they’ve done well there ... Stelvio looked better when I saw it on the road, but the driving dynamics are fantastic."

Alfa is restarting its climb toward 400,000 units annually, a goal FCA CEO Sergio Marchionne set for the brand at the previous five-year plan in 2014. But in an exchange with investors at the new five-year plan presentation outside Milan last week, he "confessed (FCA's) sins" for not delivering on Alfa's original plan promised four years ago.

"We underestimated the industrial complexity of launching a brand as complex as Alfa Romeo," he said. More importantly, though, Marchionne said FCA "underestimated the reaction of our German competitors" to Alfa Romeo in the U.S. "We have found it to be a lot more difficult to penetrate premium market than we thought."

Through May, Alfa Romeo represented only 1.2 percent of the luxury market, according to data provided by Edmunds. The Stelvio accounted for 45 percent of Alfa Romeo's 10,016 units in the U.S. through the first five months of the year.

Maserati does not report its sales in the U.S. It accounts for an estimated 0.5 percent of the luxury market, but is targeting a lofty 100,000 units annually by 2022. The ultra luxury brand gets a mid-size SUV and a full-size wagon in the new five-year plan, and its powertrains will be provided by Ferrari. Maserati is also getting a performance-based electrification push to compete with Silicon Valley's Tesla Inc.

Maserati's first SUV is built at the 79-year-old Mirafiori plant outside Turin, ancestral home to the founding Fiat SpA. The new product was a sign of hope in 2016 at FCA's oldest plant, a sprawling 10.5 million square-foot plant employing 3,630 workers in Italy's industrial heartland.

The Levante is a symbol of hope for the brand, too, whose market share sits at an estimated 0.1 percent through May, according to Edmunds. The brand does not report sales, which is why its market share is only an estimate, but Kelley Blue Book says Maserati's impact is so minuscule it doesn't even include estimates for the brand in its data.

Maserati's share of just the luxury SUV market sits at an estimated 0.4 percent, behind Alfa Romeo's 0.9 percent, according to Edmunds. Both of the brands trail Jaguar, capturing 1.5 percent of the market and Porsche, which captures 2.8 percent. 

"When you look at Jaguar without the F-Pace, we would be writing off that brand by now," Sullivan said, referring to the British marque's first SUV. "The crossover is where you see the most potential for brand success in the short term and the long term."

The luxury SUV market is dominated by Lexus, Mercedes-Benz and BMW, all of which occupy more than 10 percent each of the lucrative segment. That's why Marchionne has identified two of Fiat Chrysler's most historic Italian brands to take on Germany's automotive colossus. 

Maserati and Alfa Romeo have devout followers, similar to those the Germans have nurtured for decades. And in the long-game, Maserati and Alfa are "protectable," Marchionne insisted, against a possible shift to driverless pods without badges – what investors call the "white box" scenario.

"When I look at our competitors, especially in the U.S.," he said, "I struggle to find – of all the available brands out there – which ones could survive the white box migration. I don't think there's one."

nnaughton@detroitnews.com

Twitter: @noranaughton