Fiat said to delay Maserati, Alfa Romeo models on China woes
[MILAN] Fiat Chrysler Automobiles NV is delaying several new models, including a Maserati sports car and a full-sized Alfa Romeo sedan, as the automaker shifts spending to adjust to flagging growth in China, people familiar with the matter said.
The Maserati Alfieri sports car and an Alfa Romeo sport utility vehicle are among several new vehicles that won't go on sale as planned next year, said the people, who asked not to be identified because the discussions are private. An Alfa Romeo sedan that would challenge the likes of the BMW 5-Series may not be ready for 2017 as originally planned, as the brand shifts spending to upgrades of its best-selling cars, the Giulietta and MiTo compacts, the people said.
Discussions over investments through 2018 are ongoing, and final decisions haven't yet been made, the people said. Chief Executive Officer Sergio Marchionne is set to unveil changes in January, they said. Representatives for Fiat Chrysler declined to comment on spending plans.
The delays show the impact of the slowdown in China, where the economy is forecast to expand at the slowest pace since 1990. That's forcing Marchionne to tweak an ambitious plan to invest 48 billion euros (S$72 billion) over five years just as he's set to lose the reliable profits generated by Ferrari NV. Shareholders in Fiat, which is strained by 10.3 billion euros in net debt, will meet Thursday to approve the complete spin off of the supercar unit.
"After selling off the family's silver, Fiat is still loaded with debt as Alfa Romeo is far away from generating cash," said Ian Fletcher, an analyst at IHS in London. "While it's a rational decision to step back from some projects and concentrate resources on the most important ones, the carmaker isn't getting nearer to its 2018 sales target" of selling 7 million cars. The market researcher forecasts deliveries rising to 5.1 million vehicles that year.
Fiat's investment is now set to be less aggressive than planned in 2016, which was slated to be the peak year of spending on Fiat's strategy focused on expanding the Maserati, Jeep and Alfa Romeo into global brands. The reallocation entails a shift for Alfa Romeo as it initially focuses on models for Europe's revitalized auto market.
Instead of pushing for growth in China with a bigger sedan, Alfa Romeo plans to renew the MiTo hatchback, which was scrapped in the original plan. It will also upgrade the Giulietta compact. The new versions of Giulietta and MiTo will be unveiled in the first half of 2016, the people said.
The brand's expansion has been rocky. The start of deliveries for the new Giulia sedan was delayed by a few months for final development work, and Alfa Romeo's first SUV, which will be presented next year, won't likely make it to customers until early 2017. Still, Fiat Chrysler hasn't universally postponed new models. The Italian-US automaker's Fiat brand recently introduced the new 12,500-euro Tipo hatchback in Europe and presented the all-new 124 Spider roadster.
The carmaker is also boosting its SUV lineup as it seeks to benefit from strong demand in the US. Maserati will present the Levante in March at the Geneva motor show. The brand's first SUV will go on sale next year. Jeep, the group's fastest growing unit, is set to unveil a new mid-sized SUV next year, and Marchionne has said he may raise Jeep's 2018 target of 1.9 million deliveries following robust demand for the compact Renegade.
Still, Marchionne acknowledged that the slowdown in China is causing the company to "rethink" its model strategy, including a shift to models "more ideally suited" for Europe and North America than China, he said on an Oct 28 conference call with analysts. The CEO reaffirmed his 2018 group targets at the time.
BLOOMBERG
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