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Fiat Chrysler's lofty target for Alfa Romeo unrealistic -experts

May 10 2014, 20:21 IST
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SummaryActor Dustin Hoffman made Alfa Romeo trendy for Americans by driving a red Spider 1600 in the 1967 movie...

Actor Dustin Hoffman made Alfa Romeo trendy for Americans by driving a red Spider 1600 in the 1967 movie "The Graduate," but Alfa sales never took off in the North American market and the company ultimately pulled out.

Fiat Chrysler Automobiles, Alfa's current owner, this week revealed a strategy for the sporty Italian brand to race from zero to 150,000 sales in just four years. But industry experts, some citing the more than two decades it took Volkswagen's Audi brand to achieve that market level, say the plan is overly ambitious.

"It is mathematically possible for Alfa to sell 150,000 in North America by 2018, but so is winning the lottery," LMC Automotive analyst Jeff Schuster said.

Chief Executive Sergio Marchionne and his team revealed their strategy for Alfa Romeo on Tuesday as part of a five-year plan to establish Fiat Chrysler as a strong global automaker. But Fiat SpA's shares fell so quickly on Wednesday that trading in them was suspended briefly.

Critics of the Alfa rejuvenation plan, including investors, industry analysts and bankers, cite concerns about distribution, the challenge of bringing eight new models to market in such a short time frame and the intense competition of the market.

This is not the first time Marchionne said Alfa was coming to the United States. In January 2013, he said "for sure" it would return that year with the 4C sports coupe. The car is now expected to make it to the U.S. market later this year, followed by a higher-volume model in late 2015.

Industry observers say Marchionne had better have his back-up plan ready.

"One hundred fifty thousand sales; what's Lincoln doing this year? And they're trying," said a banker who asked not to be named, referring to Ford's luxury brand, which sold about 82,000 vehicles last year.

Fiat's plan depends on several elements that leave observers cold, starting with selling Alfa vehicles through Fiat show-rooms.

"Alfa will only work if it's got a dedicated facility or it is paired with another luxury brand," said Jim Ziegler, a U.S. auto dealer consultant. "You can't have the same sales team selling $17,000 cars from one brand and $60,000 cars from another. It just doesn't work that way."

Fiat Chrysler is expected to sell Alfas at its best-performing Fiat dealers, as well as high-end Maserati dealers. Fiat dealers number 344 in North America, while Maserati locations total 91.

Harold Wester, CEO for Alfa and Maserati, raised eyebrows when

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