PARENT FIAT BLAMES MARKETING, DISTRIBUTION LOSSES

By Published on .

Even in boom times, the automotive market produces losers.

Fiat SpA's decision to pull the Alfa Romeo out of North America at the end of 1995 follows a year in which Alfa was the only European luxury car brand to show a U.S. sales decline, and comes despite predictions of a stronger overall vehicle market this year.

Orlando-based Alfa Romeo Distributors of North America blamed significant economic losses at both the manufacturing and distribution levels after selling only 565 cars in the U.S. last year, a 57.4% drop from 1993. In 1986, when European luxury car brands' popularity peaked, U.S. sales reached 8,201 units.

"The world passed them by," said John Bulcroft, president of the Advisory Group, a Cresskill, N.J., auto marketing consultancy. He said Alfa wasn't competitive either in product or in providing marketing support.

The Alfa Romeo Spider once held a particular emotional appeal for baby boomers, going back to Dustin Hoffman speeding up and down the California coast in the late 1960s movie, "The Graduate."

But the Spider has evolved little since then, and Alfa's other U.S. offering, the 164 sedan, never caught on after its 1990 introduction.

"People are buying retro looks in cars like the Mazda Miata, but they want up-to-date technology," Mr. Bulcroft said.

Conquest USA, Paramus, N.J., is the agency for the account. Alfa spent an estimated $10 million a year on marketing programs when the agency won the business in 1992, but that slipped to an estimated $2 million last year.

Mr. Bulcroft said Fiat's inability to make it in the highly competitive U.S. market should give pause to automakers like France's Citroen, which is considering entering.

"The question they have to answer is whether they have the stomach and the money to rebuild a network here," Mr. Bulcroft said.

In this article:
Most Popular