ARESE, Italy—Fiat Chrysler Automobiles NV on Wednesday unveiled
an Alfa Romeo sedan that it billed as the start of the renaissance
of the storied sports car brand and a key part of its plan to lift
sales by 50% by 2018.
The luxury sedan is the first vehicle from a €5 billion ($5.6
billion) Alfa investment plan that aims to leverage the brand's
racing history to take on Audi, BMW and Mercedes-Benz.
Called Giulia, the rear-wheel-drive Alfa Romeo is due to go on
sale sometime next year. Pricing wasn't disclosed.
Chief Executive Sergio Marchionne described the project as a
deeply personal endeavor. "It is no mystery that Alfa is one of the
projects that I have been most involved in, both operationally and
emotionally," said Mr. Marchionne. "It is one of the most important
of my career."
Wednesday's unveiling, on the 105th anniversary of the Alfa
Romeo brand, came with pomp and circumstance that included a
surprise appearance by Italian tenor Andrea Bocelli, who sang an
aria from Giacomo Puccini's Turandot.
To achieve his goals for Alfa, Mr. Marchionne, who saved Fiat
from falling into bankruptcy and led Chrysler out of a similar
fate, must pull off one of the Houdini acts he has become famous
for.
The Fiat Chrysler merger made it possible to have the financial
resources, technical capability and global distribution needed to
relaunch Alfa, Mr. Marchionne said. The combined company projects
global sales this year of between 4.8 million and 5 million
vehicles.
The ambitious five-year sales forecasts have drawn skepticism
from analysts and industry insiders. Mr. Marchionne has already
missed his sales targets on Alfa several times. The CEO had a
previous plan that called for 500,000 in vehicle sales in 2014, but
the company actually sold about 70,000. Sales have fallen almost
uninterruptedly for 15 years from a high of more than 200,000 in
2001.
Mr. Marchionne must also return Alfa to profitability. Though
Fiat Chrysler doesn't break out the profitability figures for its
individual brands, many analysts reckon Alfa has been accumulating
losses for at least a decade.
Alfa Romeo brand chief Harald Wester, also Fiat Chrysler's chief
technology officer, is moving Alfa upmarket, which took competitors
decades to achieve.
"Audi took 30 years to become a premium brand, but it has to do
with where they were before," Mr. Wester said in an interview
earlier this year. "Alfa has a historic legacy that it can
leverage."
Mr. Wester—who spent time previously at Volkswagen, Audi and
Ferrari—has been working with Mr. Marchionne for more than a year
disseminating the idea that Alfa's racing legacy will help sell
sedans, sport-utility vehicles and roadsters. When Fiat Chrysler
presented its five-year plan, Mr. Wester used more than a quarter
of his presentation to recall the glory of Alfa's racing days.
Some analysts remain unconvinced. Sanford C. Bernstein
auto-industry analyst Max Warburton last week wrote that FCA's plan
for Alfa is unachievable and Mr. Marchionne's aggressive targets
are part of "a high-stakes plan" aimed at making Fiat Chrysler more
appealing to a potential buyer.
Mr. Marchionne has made no secret of wanting to find a partner
so Fiat Chrysler can beef up and be better prepared for any market
downturn. On Wednesday, he said an eventual deal involving Fiat
Chrysler wouldn't impact the Alfa relaunch plan.
Alfa had fallen on hard times when Fiat acquired the company in
the mid-1980s from an Italian state holding company. Fiat
subsequently brought its namesake brand too close to Alfa with the
result being a line of uninspiring Alfas that had no connection
with the company's past, said Mr. Wester. More recently, Alfa has
suffered from a lack of investment.
The way to set Alfa right, according to Mr. Wester, was to have
a clearer separation from Fiat. To that end, Alfa set up a team of
engineers, mechanics, machinists and designers in Modena, far from
Fiat Chrysler's Italian head offices in Turin and close to the
headquarters of Ferrari and Maserati, pricey sports-car brands also
owned by Fiat. That allowed them to toil without the interference
of "the Fiat Chrysler machine," said Mr. Wester.
The unveiling coincided with the inauguration of a newly
expanded museum dedicated to Alfa in one of its decommissioned
factories on the outskirts of Milan. As with everything else linked
to the new Alfa car, the museum aims to be innovative while harking
back to a proud heritage.
"It's like when the wife wants to watch a movie on television
and the husband wants to watch the game, it seems impossible to
find a solution, but we did it," said Benedetto Camerana, the
architect who led the remodeling of the museum.
Write to Eric Sylvers at eric.sylvers@wsj.com
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