FCA eases back on Alfa

Alfa Romeo's eight-car assault on Germany's stranglehold on the global premium car and SUV market by 2018 is over.

Buried deep inside Fiat Chrysler Automobiles’ fourth-quarter earnings report was an admission that the job of delivering so many cars from a standing start was too much for its Italian premium brand.

Instead, it has committed to delivering just the already-delayed Giulia mid-size sedan and a mid-size crossover SUV by the end of 2017 – the only two cars, say insiders, that actually have confirmed development programs.

FCA CEO Sergio Marchionne’s ambitious 2014 plan for Alfa Romeo’s big-splash comeback would have seen it deliver eight models by 2018, with the equally ambitious goal to sell 400,000 of them globally by the same deadline. Its sales target for Alfa Romeo is now down to 150,000 cars a year by 2018.

The updated business plan in yesterday’s document confirms the rest of the proposed range, including a large sedan to compete with the Mercedes-Benz E-Class, Audi A6, BMW 5Series, Jaguar XF and Lexus GS is on hold.

Two other SUVs, two “specialty vehicles” believed to be a hard-core coupe based on the Giulia and a larger grand-touring coupe, and a hatchback, have all been pushed back, too.

In place of the 2014 plan is a vague concept to deliver more models between 2017 and 2020 and a refocus on jiggling production and development to sell more full-size SUVs and pick-ups in the US, which are generating the lion’s share of FCA cash flow today.

The report insisted fuel prices would be “permanent”, which leads it to expect US consumers to keep veering towards big vehicles over the svelte ones.

In a nod to the world outside North America, it also said it would deliver new small and mid-size car architectures later this year and equip them with 48-volt hybrid powertrains in 2018, ostensibly to meet upcoming reductions in CO2 emissions limits.

That electrification of the powertrain will stretch to the Jeep Wrangler and even the RAM 1500 pick-up, both of which will get hybrid power, though it’s believed to be the mild hybrid system, rather than a Prius-like piece of engineering.

It has also teased diesel power for the next generation of the Wrangler, which begins in 2017, though the report’s timeline shows diesel being introduced in a vague period before 2022.

The fourth-quarter earnings of the Italo-American company rose 39 per cent on the back of Jeep’s continued ascendency and RAM’s growth.

Its profit for the quarter jumped from €1.18 billion in 2014 to €1.64 billion in 2015, lifting its full-year profit to €5.3 billion.

It’s predicting slower growth in 2016, though the report insists FCA’s net industrial debt will decrease to below €5 billion.