Jean-Philippe Imparato's strategy for Alfa Romeo

[pumadog]

Alfa's new boss Imparato had a round table talk with Italian press. Some tidbits:

• "When you're at Peugeot, which grosses billions of euros a year, you don't go to Alfa Romeo for career reasons. You do it personally, for reasons of passion."
• "The Tonale is Alfa Romeo's first electrified car, … so I decided that we had to update the Phev right away." Production will start in Pomigliano in March 2022, while the commercial launch is set for the first week of June 2022.
• "I confirm that we are working on the new Small platform and I confirm that there is an Alfa Romeo planned in Tychy: every new model will be electrified and full-electric, starting with the Tonale in 2022."
• "When you see that Europe imposes a -60% of CO2 in 2030 if you're not electrified, you're dead … Future Alfa Romeo models will be "obviously electrified, 100%".
• "We are working on the Large platform of Stellantis and we will no longer use the Giorgio: we must take advantage of the volumes to take all possible opportunities and bring in Alfa Romeo an EV range, but always with the Alfa Romeo touch."
• "The thing that I think needs to be fixed is that you don't have to change strategy every day: we need stability. What we are doing is putting a plan on track over ten years, with the (projects of the) first five years programmed, planned, validated and funded. Once we do that, we don't change."
• "At the end of the year we will meet to present what comes after Tonale."
• "To have sustained economic performance you have to get into the segments where you can do the right level of volumes and the right level of revenues." This means that in the near future Alfa Romeo could return to market segments where it has been absent for years, offering compact models…
• Currently under study is an entire line of Quadrifoglio versions. "Proposals will be evaluated and we won't betray the spirit of the Quadrifoglio: if we feel that on a car you can't make a sport version then we won't make it, it's not a problem."
• "There's also the fact that our 'tribe' needs access to cars that give you sensations on a human budget, as well as top models with extreme performance."
• "Alfa Romeo remains in America" "The cost of entering this country is enormous and when you are lucky enough to be there with your products, you don't get out"
• "Before we can exploit [China], we need solidity in Europe and the USA".

Source (IT): Alfa Romeo - Imparato: "Tonale nel giugno 2022, tutti i futuri modelli saranno elettrificati"

 

[pumadog]

As sad as Tonale's further postponement is for Alfa's short term performance 2021-2022, I get how important it is to have it absolutely up-to-date in performance and the electric powertrain. They can't bring a car that feels outdated already at launch in the current electro hype. And if the article is correct they plan to bring a 100% electric version.
Are we sure that the STLA Large platform is electrified Giorgio (Global)? I hope so. As STLA Medium goes up to D segment, Large isn't needed for Peugeot/Citroën/Fiat and can stay RWD.
So I hope the strategy turns out to be great and Imparato stays for many years so I'm blessed to see Alfa's stable model rollout until I become too old to drive — in 30-40 years.

 

[cygnus]

Anyone care to parse what -"every new model will be electrified and full-electric," means?

There's going to be a BEV (fully electric) or PHEV/MHEV variant of every new Alfa?

Is the 2024 or 2025 redesign of Giulia/Stelvio considered a 'new' Alfa?

What is 'Large' in relation to Giorgio Global?

 

[Bili]

@pumadog

Imparato isn't telling the truth. That's for sure.

Tonale's postponement is because of cost reduction, because of financial performance. From what I've heard production could start full month earlier than Imparato is saying.
Not to mention that PHEV variant was not planned as the first. It was planned for SOP in the late February 2022.
From what I know Tonale ICE SOP was scheduled for the very end of December 2021. It's moved back to early February 2022. That's 35 or 37 days later. I must calculate it but it's postponement of less than 30 days.
One postponement has already happened.

I admit one thing, well few, to Imparato. He is very skilled at marketing level. And he is master of retail sales channel. He said that they will not sales too much Tonale's through fleets.
Actually PSA doesn't shine when it comes to fleet margins. Their success came through retail sales.

No, he didn't say that Tonale will be BEV. BEVs will come in the future.

About Giorgio. Actually they've updated the article:
"( ed: later, Imparato wanted to specify that the Giorgio platform will not be archived, but will be integrated into the Stellantis architecture system, namely Small, Medium and Large ) ".
As I said earlier. Large will be non other than Giorgio. But for political correctness STLA will rename all of their platforms.

Looking at PSA and at Imparato I'm not sure that they will push with mechanical excellence. All their care about are production costs. Keep them as low as possible and hope that marketing can fix all.

I must say that they've already killed some important parts for Giulia and Stelvio MCA. For example it seems that non QV versions will not have carbon driveshaft. Infotainment upgrade to UConnect 5 is in jeopardy because they don't want to spend in slightly revised IP, IP which would be able to host bigger screen.


@cygnus

In the long run STLA doesn't have plans to offer PHEVs. Already late this decade they will have few PHEVs in the line-up. It will be BEV or ICE/MHEV. Of course there are many different MHEVs, different effect, fuel saving, operation. Some MHEVs can operate very similarly to HEVs.

I must say that I don't like abandonment of PHEV.

 

[pumadog]

Imparato isn't telling the truth. That's for sure.

Don't hesitate to back that up!

About Giorgio. Actually they've updated the article:
"( ed: later, Imparato wanted to specify that the Giorgio platform will not be archived, but will be integrated into the Stellantis architecture system, namely Small, Medium and Large ) ".
As I said earlier. Large will be non other than Giorgio. But for political correctness STLA will rename all of their platforms.

Thanks for pointing to that. The renaming is fine for me, because nobody can remember all the acronyms for all the carmaker platforms. Just go on with Large v3, Small v5 over time. Also the Mopar fans might finally accept the joined platforms with Italy.

For example it seems that non QV versions will not have carbon driveshaft. Infotainment upgrade to UConnect 5 is in jeopardy because they don't want to spend in slightly revised IP, IP which would be able to host bigger screen.

Metal driveshaft is good, because it won't make any difference for the experience but will save money. Alfa needs to make money to stay alive.

About MHEV/PHEV/BEV mix, Stellantis simply has to find the right balance between consumer demand and political conditions. If ICE versions are forbidden in 2030, there's not much they can do about it.

 

[Bili]

Don't hesitate to back that up!

We had it in another thread. For French it's all about cost cut.

Metal driveshaft is good, because it won't make any difference for the experience but will save money. Alfa needs to make money to stay alive.

Cost cut measure which leads on slightly less reactive cars. Plus you will have additional maintenance which you don't have with carbon propshaft.

I'm completely against it and I'm hopping that they will abandon this very bad idea. What's next? Less aluminium parts? God help us.

About MHEV/PHEV/BEV mix, Stellantis simply has to find the right balance between consumer demand and political conditions. If ICE versions are forbidden in 2030, there's not much they can do about it.

It's all about cost cut. BEV means simpler production and less dependency on suppliers. Just look at PSA's electrification strategy. Cost cut is the main theme.

Ah... They've killed Giulia and Stelvio PHEV. Disgusting.

ICE version ban? All heard is pure ICE ban, not MHEV or PHEV ban. As I said it's all about cost cut for P... ehm, Stellantis.

I'm not fan of PSA's approach. Many substandard products. French nationalist car market is buying it but they are not particularly successful once they cross the border.
I was hoping to see combination of best PSA and FCA practices. Many products combines with very high engineering goals. But more and more it's apparent that we'll not see it.

 

[pumadog]

I was hoping for some explanation or evidence. So far it's only claims and opinion from you.

 

[Bili]

So far it's only claims and opinion from you.

Not opinion.

For PSA side of the group it's all about cost savings. And yes, they are even pushing American side of the ex-FCA.

First Portuguese mag wanted to move Tonale to EMP2. He failed. The newest attempt was to move its production from Pomigliano to Melfi.
Every time it took time because of feasibility studies and work has stopped. PHEV story is just a smoke screen. PHEV is not planned as the first version to go into production. PHEV was planned to go into production in late February 2022, not sooner.

 

[Tony K]

For PSA side of the group it's all about cost savings.

Depends on where they're cutting costs, and who they're selling the cars to. If I'm selling "appliances," and streamline my componentry, but don't cut so much into component costs that the quality of the componentry significantly affects the overall product quality and reliability, that's appropriate cost savings. Alfa Romeo shouldn't be subject to the same cost cutting knives that so called "appliance" brands could see, or at least not in the same fashion.

Nobody expects economy cars to come "dressed to the nines." Cheaper interiors, for example on base trim Dodges - which are seemingly going to exist as "appliances" under STLA - would be expected in cars with considerable enough volume to be able to take advantage of cost savings. That might be nothing more than economy grade interior coverings and no frills lighting, gauges, and other driver-facing electronics, including minimum required "nanny systems." Again, all assuming the decontent makes financial sense - which necessarily includes factoring in the presumptive reduction in potential after-sale costs from warranty claims you won't have if something isn't there (or what is has less complexity) to break/malfunction. For Alfa which is not and should never be an "appliance" (and Chrysler, which should always be a step above "appliance grade" at a minimum) one should expect that "base" models would not be "decontented," and "base trim" starts at "upscale."

All that said, in order for Alfa to sell cars in sufficient quantities to run efficient assembly lines and even be able to maintain its overall margin, there has to be of necessity some holding the line on costs. Tavares and Imparato have to balance that with the requirements of being Alfa Romeo, something considerably different from those of a Peugeot or even Fiat. I'm more positive than you that they "get it."

 

[cygnus]

For Alfa to succeed in the numbers they want, everything has to be an absolute home run - product and service. They need to out compete BMW/Mercedes/Audi, and to an extent Tesla, which has taken a HUGE chunk of this vehicle segment from the Germans.

They are cutting the necessary product updates for Alfa (by cutting the PHEV variants for Giulia/Stelvio) and Alfa will continue to sell lower than internal expectations. If UConnect5 is cut, forget it. It was always going to be an uphill battle, but it's now been made impossible.

There's your proof of cost cutting, right there.

It seems that they are putting all of their hopes/money into getting Maserati to compete in this segment, but Maserati is way more expensive than Tesla/German brands. They really want to get all of the profit/margin similar to Ferrari, at a lower price point/higher volumes.

I'm not sure if the volumes at the $80-120K USD price point will prove this to be the Ferrari like profits they are chasing.

 

[Tony K]

First Portuguese mag wanted to move Tonale to EMP2. He failed. The newest attempt was to move its production from Pomigliano to Melfi.
Every time it took time because of feasibility studies and work has stopped.

Sounds like Tavares is doing the right things, then. They're not going to do something that doesn't make sense just because they spent x amount of time and coin. Remember, this is a new corporation that's still uncoiling and trying to find its way. There's by nature going to be quite a bit of "discovery learning" going on just to figure out the actual way ahead, because as an old Prussian general so succinctly put it...

No plan survives first contact with the enemy.
- Moltke the Elder

paraphrased (from No plan of operations extends with any certainty beyond the first contact with the main hostile force.
(Kein Operationsplan reicht mit einiger Sicherheit über das erste Zusammentreffen mit der feindlichen Hauptmacht hinaus.)
from "On Strategy" (1871)/"Über Strategie" (1871), as translated in Moltke on the Art of War: Selected Writings (1993) by Daniel J. Hughes and Harry Bell, p. 92; German collected in: Kriegsgeschichtliche Einzelschriften, H.13 (1890), hier zitiert nach: Militārische Werke, Band 2, Teil 2. Mittler & Sohn Berlin 1900.

The US Army distilled it down even further at combat training centers, where we have permanent "enemy" forces called OPFOR (opposing force).

The enemy has a vote.

In the business world, "the enemy" is no less complex.

 

[Bili]

Sounds like Tavares is doing the right things, then.

Right thing while nothing has changed. Hmh.

The above posts. AFAIK PSA is not doing cost cut on interiors, not even on their mid level brands, i.e. Peugeot and Opel. But anything can happen.
What PSA does and what's in their culture is mechanic deconent. They don't care much about performance. Performance always comes at cost.

For Alfa to succeed in the numbers they want, everything has to be an absolute home run - product and service.

They are cutting the necessary product updates for Alfa (by cutting the PHEV variants for Giulia/Stelvio) to keep Alfa from taking on more water. If UConnect5 is cut, forget it. It was always going to be an uphill battle, but it's now been made impossible.

There's your proof of cost cutting, right there.

Yeah, they are saving big time on MCAs. Not in a good way. The question is. Can they fit 10.25" screens or maybe previous management wanted even bigger 12.3" infotainment. Both are Uconnect 5. But AFAIK Uconnect 5 was not planned with current 8.8" screens.

So if current IP can be fitted with 10.25" than it's acceptable.

Yeah, PHEVs are expensive for them.

 

[TripleT]

So GM in the 90s where you have the same car with different styling running around pretending it good in every application when in reality it isn't very good at anything.

Pepe Le Cheapskate will ruin the brands in the EU.. hope he keeps his fingers clear of NA.

 

[cygnus]

Case in point - the sub $40K PHEV offering from Stellantis in Europe is a DS PHEV, starting in Q4 2021, and lacks AWD.

The Germans have more expensive PHEVs that have AWD - guess who will generate the most profit in EU on PHEVs in 2021 and 2022?

 

[Tony K]

What PSA does and what's in their culture is mechanic deconent. They don't care much about performance. Performance always comes at cost.

This just comes across as catastrophizing. Alfa is a performance brand. Stellantis understands this, and Imperato's statement about not coming to AR as a career move acknowledges that understanding. I can't see AR being mechanically decontented to the level of PSA brands, none of which are "performance oriented" by nature. That's not the same as saying they (PSA) don't have performance versions. They're more like a Dodge. You have Challenger base models, R/Ts, SRT Hellcats, and the occasional hypercar version like Demon. Alfa STARTS at an "R/T" equivalent. I had to put 275-40 ZR20* tires on the back of my 2009 Challenger R/T to put full power to the ground from a standing start, and it only has 375 HP and weighs ~ 4000 lbs (~ 1800 kg)

*G-Force Sport Comp2

 

[cygnus]

I don't really see competitive PHEV/BEV offerings from Stellantis via PSA/DS and they're cutting Alfa's budget. Where is the profit in Europe going to come from then - Maserati?

What were profits from PSA/DS last year vs. Alfa/Fiat/Maesarati in Europe?

PSA/DS offerings (which are primarily FWD) should be designed/manufactured in China. Europe should build Fiat (to satisfy union agreements and fill up plants, and there is genuine city car vehicle demand in Europe), Alfa, and Maserati (to generate actual profits).

Small = FWD
Medium = FWD/AWD
Large = RWD/AWD

Whether it's ICE/PHEV/MHEV/BEV.

Body on Frame designs in North America pay their own way - always have and always will.

Small and medium need to be designed/built for the Chinese market if Stellantis is going to make good on their promise to be competitive in China. Pacifying French national interests isn't a valid business case for PSA/DS.

Stellantis should use the GM template for getting vehicle designs/parts for PSA/DS in China and then bringing it to Europe, if they're so concerned about costs. But they're not, this is political gamesmanship at this point for French national interests, which is a detriment to Stellantis shareholders.

 

[Tony K]

Pacifying French national interests isn't a valid business case for PSA/DS.

The French market (read all Eurpean home markets) won't see it this way. It's not just a French government interest. The French government has a stake because the French voter makes that possible. That's why Stellantis exists - lessen French power. But you can lessen French power all you want, and it doesn't change the parochial nature of the European auto market. Germany isn't much better. Opels sold as company cars in Germany will of necessity be built in Germany, for example. European businesses understand taking care of yourself and family first. Personally purchased vehicles may have a better chance of being manufactured in China, especially the economy segments. Frenchmen are not going to take kindly to building Italian cars, ESPECIALLY if they're not also building French cars on the same lines, and DEFINITELY not if the French car is perceived to be inferior. Likewise in Italy and Germany and in like respects.

 

[cygnus]

Then there will be no profits generated in Europe outside of Maserati. GM's decision to sell Opel was a wise move then.

If people disagree - please show your math where the profitable vehicles sold in Europe will be built/what segment it will occupy/what the vehicle profile is with respect to where the components are manufactured and whether it's FWD, FWD+AWD, or RWD/AWD, and whether a similar vehicle will be sold in the US.

I have heard whispers of a certain Dodge product that will be built in the EU and exported to the US, but I won't spoil the fun for the insiders to reveal it first.

Here's a hint - it's not based on a PSA platform.

 

[Tony K]

Then there will be no profits generated in Europe outside of Maserati. GM's decision to sell Opel was a wise move then.

If people disagree - please show your math where the profitable vehicles sold in Europe will be built/what segment it will occupy/what the vehicle profile is with respect to where the components are manufactured and whether it's FWD, FWD+AWD, or RWD/AWD, and whether a similar vehicle will be sold in the US.

I have heard whispers of a certain Dodge product that will be built in the EU and exported to the US, but I won't spoil the fun for the insiders to reveal it first.

Here's a hint - it's not based on a PSA platform.

How about the folks with the big financial stake in it show us their work first? Sorry, but this is just so much kowtowing to corporate money men "gaslighting" the workforce and the nations into accepting less for their labor and not affording them the pride of workmanship in something with their identity on it, let alone the means to afford it, in the case of vehicles for the working class market. Henry Ford had this figured out a century ago. The National Academy of Sciences debunked this thinking in the early 90s with Dispelling the Manufacturing Myth: American Factories Can Compete in the Global Marketplace (1992)

 

[Bili]

This just comes across as catastrophizing. Alfa is a performance brand. Stellantis understands this, and Imperato's statement about not coming to AR as a career move acknowledges that understanding. I can't see AR being mechanically decontented to the level of PSA brands, none of which are "performance oriented" by nature. That's not the same as saying they (PSA) don't have performance versions. They're more like a Dodge. You have Challenger base models, R/Ts, SRT Hellcats, and the occasional hypercar version like Demon. Alfa STARTS at an "R/T" equivalent. I had to put 275-40 ZR20* tires on the back of my 2009 Challenger R/T to put full power to the ground from a standing start, and it only has 375 HP and weighs ~ 4000 lbs (~ 1800 kg)

*G-Force Sport Comp2

Alfa Romeo is European performance which means that a lot of is focused on handling, on feeling and fun factor connected to it. Such way of performance usually means elevated price level and classification into premium car makers. Premium as in the Europe which means luxury in US. Maserati is one or at least half a step above this segment.

Alfa Romeo has a long history of performance engine, engines with performance features. For example their Inline 4 had exclusively aluminium engine block, double overhead camshaft and hemispherical combustion engines. And it was that way till the mid 90s.
Their D and E segment cars were RWD with front engine, rear transaxle till 1992.
Front engine was exclusively double wishbone type for their D and E segment cars with only exception in short lived FWD based Alfa 155. So even FWD Alfas had at the time state of art suspension scheme.
Even Fiat based FWD Alfa 156 from 1997 had independent suspension all around with a lot of aluminium and magnesium throughout car. It was so good that production based car won against BME 3er on the track. Accent on production based cars because nowadays most racing cars share only silhouette and name with production version. One of the reasons behind Sergio's willingness for motorsport participation lied behind this reason, no production based racing anymore.

So yes, we all expect something more from Alfa Romeo. But this is not PSA's way. And it's not the way how are they making distinction between their products.
And of course they can't make a proper Alfa on PSA's bones in a very short amount of time. Any proper joint development will not be seen before calendar 2024. So let's say that any Alfa coming before that date on PSA platforms would be half arsed.

I have my opinion about PSA platforms and it's not good. They are lacking in terms of hardware but in general they have suboptimal packaging for FWD platforms with transverse engine and it can be seen on EMP2 cars with IRS (independent rear suspension) like the new Peugeot 508. It has no more rear leg room than RWD based Alfa Giulia. How is that possible? Hmh.
And for Jeep in US and some other markets where most likely electrification will not be so widespread they would need to reengineer them to add mechanical AWD option.

I would not go into brand positioning except that I don't see the point of keeping DS and Lancia alive. I would push Peugeot slightly more upscale at some segments in the way how VAG did it with some of VW products for some markets like VW Toureg and Phideon.

One slide from the latest Stellantis presentation doesn't put much fate into powertrain side, to me Nidec and Punch seems like a ultimate cost cut solutions:

I don't really see competitive PHEV/BEV offerings from Stellantis via PSA/DS and they're cutting Alfa's budget. Where is the profit in Europe going to come from then - Maserati?

What were profits from PSA/DS last year vs. Alfa/Fiat/Maesarati in Europe?

PSA/DS offerings (which are primarily FWD) should be designed/manufactured in China. Europe should build Fiat (to satisfy union agreements and fill up plants, and there is genuine city car vehicle demand in Europe), Alfa, and Maserati (to generate actual profits).

Small = FWD
Medium = FWD/AWD
Large = RWD/AWD

Whether it's ICE/PHEV/MHEV/BEV.

Body on Frame designs in North America pay their own way - always have and always will.

Small and medium need to be designed/built for the Chinese market if Stellantis is going to make good on their promise to be competitive in China. Pacifying French national interests isn't a valid business case for PSA/DS.

Stellantis should use the GM template for getting vehicle designs/parts for PSA/DS in China and then bringing it to Europe, if they're so concerned about costs. But they're not, this is political gamesmanship at this point for French national interests, which is a detriment to Stellantis shareholders.

PSA makes a lot of money in Europe. Almost a double digit EBIT margin. They are heavy hitters in Europe.

But question is how they came to this.

Very low investments, low on CAPEX. For example in 2020 they spent something x3.5 less than FCA. I'm pretty much sure that the all new factory for Grand Cherokee wouldn't be approved under their watch.
Then factory cleaning, investment for new robots, tooling... Even electricity. That's all kept at the minimum. Just look at some pictures or videos from "new" PSA factories and compare it to modern FCA counterparts.

AFAIK they borrowed money at lower interest rates than FCA did. Why? French Government. They had that advantage.

Not to mention that their pallet of products is much more thinner than FCA's.

But the most important thing. They have very nationalist home market unlike Italians. German carmaker can't outsold French and even German premium trio is not particularly popular.

I'm still wondering how will they make STLA Frame suitable for both Wrangler and Ram or Wagoneer.
How will they make CMP, ehm, STLA Small suitable for A segment.

Some things don't hold water. Or maybe I know nothing.

At the same time when he made PSA so profitable in Europe Portuguese French mag Tavares almost killed PSA in South America and China. They more than halved sales in South America whule in China they fell from 700k per year to I think less than 100k. Disastrous!

Some calls on platforms and engines? I must say that some calls are very politic. Keeping of one particular French platform over better Italian. CMP over eMini. And in the Europe they are fighting to keep French petrol engines which are from two different engine families while FCA covers or will cover the same range by a single GSE/FireFly family.
In Brazil where French jobs doesn't come into play they already made decision to kill PSA engines and to switch all to GSE/FireFly.

I must say that Italian suppliers are already very dissatisfied with Stellentis.