Alfa Romeo has struggled in its US return. Will the Tonale SUV change everything?
Alfa Romeo isn't quite an alpha of the premium makes seven years after properly returning its Italian racer feistiness to the United States.
Although Jeremy Clarkson of "Top Gear" fame once proclaimed, "You can’t be a true petrolhead until you own an Alfa Romeo," the brand sold just 18,250 versions of its two aging vehicles in the country in 2021. That's down 2% year-over-year, while BMW AG and Daimler AG's Mercedes-Benz are selling hundreds of thousands of vehicles annually.
A new chapter, however, starts Tuesday. At 9 a.m. online, Alfa Romeo will reveal the highly anticipated Tonale — a smaller, more entry-level SUV for the 1910-founded brand.
Under new leadership following the Stellantis NV merger, Alfa also is expected to make its first foray into electrification with the Tonale. The company has said it will be an all-electric brand by 2027 — to the disappointment of some enthusiasts of the engines derived from Ferrari — in an effort to secure its place over the next decade in Stellantis' 14-brand lineup.
Despite the Giulia sedan and Stelvio SUV being more than five years old, the boutique brand continues to convert new "Alfistis." Dustin Denio, 43, of Livonia wanted a "car-guy kind of car" that could handle in the snow while also offering comfort to his wife and space for his two children. He bought a '19 Stelvio three months ago.
"I also looked at the Kia Stinger, but the Stelvio was just so much nicer," he said, noting he's added snow tires and made some infotainment upgrades. "It's not quite as fast, but it’s just such a very nice, tight, fun-to-drive car."
Denio is eager to see the production Tonale and what a lighter-weight ute could do. Alfa showed a concept version of a plug-in hybrid Tonale crossover at the 2019 Geneva Motor Show. Stellantis teased a plug-in hybrid Alfa Romeo reveal this year in its electrification timeline. But dealers say they know unusually little about the release that's faced delays in development and from the ongoing global chip shortage.
"I'm already getting phone calls for it," said Skip Jones, sales specialist at Jake Sweeney Alfa Romeo in Florence, Kentucky. "I don't have anything to tell them. ... But personally, I think they have to show a commitment that they are here to stay and need to bring a car that stands the test of time."
A smaller crossover might just be the needed step, experts say. It's a popular and growing segment that will provide more volume, which Alfa needs to grow its brand recognition.
"Stellantis doesn’t have a sporty luxury crossover," said Sam Fiorani, vice president of global forecasting at AutoForecast Solutions LLC. "Tapping into any niche is tough in North America, especially, but it's a niche where Mercedes and BMW make good profits on high-volume vehicles. They won’t be willing to give up that easily."
In recent years, though, Volvo Cars and Hyundai Motor Co.'s Genesis have made inroads in the market, said Jessica Caldwell, executive director of insights for auto information website Edmunds.com Inc. "These customers really want something different, something not everyone has. But Alfa Romeo hasn’t resonated quite yet."
That's why the brand and its enthusiasts are emphasizing improved reliability on the vehicles. Prior to the brand leaving the United States in 1995, Alfas became known for complexity and for breaking down.
"These cars are not like the old Alfas that we had," said Jones, 65, who drives an '18 Stelvio. "They don't leak oil like the old ones did. We used to say if it wasn’t leaking oil, it didn’t have any."
Alfa began its U.S. return in 2008 with the pricey 8C marketed at around $260,000. Only 100 sold in North America. Its proper re-entry, championed by former FCA CEO Sergio Marchionne, came in 2014 with the reveal of the 4C two-seat coupe. The Giulia debuted in 2015, and then came the Stelvio in 2016.
But even with the modern cars, improvements in serving customers is a key area of focus for Alfa, said Larry Dominique, senior vice president of Alfa Romeo in North America. That means providing sales training and ensuring service centers can get needed parts even amid supply-chain challenges. The brand rose to ninth from 13th among luxury brands in J.D. Power's Sales Satisfaction Index last year, though Alfa was last in the Customer Service Index.
Alfa Romeo CEO Jean-Philippe Imparato and Dominique joined the brand in February and March 2021, respectively, from Peugeot of the Groupe PSA side of the merger with Fiat Chrysler Automobiles NV that had owned Alfa.
"The idea was to take this amazingly historic brand, and how do we move it forward successfully?” Dominique said. “It’s always been an amazingly emotional brand. But it just never delivered on the right products, the right customer experiences or the right quality. It's kind of like great cars, drive great, but then it just drops off.
"It's about enhancing and bringing back a brand with the right customer experience, the right quality, the right performance, right profitability for us and the network.”
A year later, the brand's efforts have shown results, he said: Alfa returned to profitability in North America last year, its retailers had their most profitable year ever, and warranty costs for the last three months on vehicles from the Cassino Assembly Plant in Italy that builds the Giulia and Stelvio are down roughly 50% year-over-year.
"We've been able to stabilize things like quality," Dominique said. "We've been able to improve customer experience."
Part of that has to do with decreasing manufacturing complexity and simplifying configurations, said Bill Golling, owner of several Metro Detroit dealerships, including the Alfa Romeo Fiat location in Birmingham. For '22, the brand is offering four streamlined trims: Sprint, Ti, Veloce and the high-performance Quadrifoglio. The Giulia starts at $42,950.
"The more combinations that you had to build, the more issues you can have at times with quality," Golling said. "They're standardizing features more and more to create a consistent build in the plant."
The Genesis Alfa Romeo Fiat dealership in Macomb had its best year in 2021, sales manager Randy Phillips said.
After Alfa returned to the U.S., "our customers back then because they saw it at an auto show or in a commercial, they came into the store," he said. "Now we’re getting 'my neighbor's got one' or 'my cousin bought one' or 'I saw one at work a colleague had.' Now they're seeing it as opposed to the marketing."
Although the target may be to draw from premium competitors like Volkswagen AG's Audi or BMW, Phillips says he sees a lot of younger buyers trading in Cadillacs, Lincolns and even Stellantis' own Jeeps. The Tonale, he notes, might be a bit more accessible to some of those buyers.
"To win them over, you just have to get in the car and drive it," he said. "It's an incredible drive. There's nothing else like it."
Buying an Alfa is getting the perks of a sporty Italian car without the exorbitant price, says Craig Kline, a southwest Michigan resident who purchased a '17 Giulia Quadrifoglio in September.
"I started delving into the history and was just blown away," said Kline, 42, of St. Joseph. "There's not another company that has that niche of being somewhat accessible to the average person but having a rich racing history. It is the perfect enthusiast car."
But to be successful, Alfa has to reach beyond the "Always Looking For Another" "Alfaholics." And as Tesla Inc. redefines the meaning of luxury and regulators push a zero-carbon-emissions agenda, premium brands are turning toward electrification to pull in the buyers who tend to be early adopters of new technologies.
"You have to find a new customer base as the past six years hasn’t netted the results that they are looking for," Edmunds' Caldwell said. "The premium luxury companies, they do seem to be heading more into that direction."
Stellantis is investing $35.5 billion into electrification and software by 2025. But EVs represent about 3% of the U.S. market, and many Alfa owners love the roar of their engines.
"The technology is great and all," Alex Ciufu, 39, of Kitchener, Ontario, said of EVs. He owns a '17 Giulia Quadrifoglio and runs a YouTube channel on sporty sedans. "But especially for us in the northern climate, the subzero temperatures will just kill the battery. The convenience is not all there yet."
Still, the brand seeing investment is a positive sign for many North American enthusiasts who don't want Alfa to leave again.
"There's an expectation and affirmation that the brand is moving forward," said Matt Leavitt, owner of Alfa9 Supply, an Alfa Romeo aftersales parts supplier in Boulder, Colorado. "We're optimistic this is going to be a stepping stone and similar products are on the way."
bnoble@detroitnews.com
Twitter: @BreanaCNoble