Fiat Chrysler (NYSE:FCAU) is injecting life back into Italian luxury cars.
For people who canâ€™t afford Ferraris and Lamborghinis, Alfa Romeo and Maserati will offer a far bigger presence in the U.S. this year with new SUVs and premium sedans. The two Fiat Chrysler-owned brands, which are running on an influx of cash from their parent company, are looking to make inroads in a crowded luxury field dominated by German and Japanese rivals.
â€œYou havenâ€™t had a whole lot of new players over the last decade or so. What they bring to the table is something new and different,â€ said Michael Harley, executive analyst for Kelley Blue Book. â€œThe pie can only be sliced into so many pieces, but they donâ€™t have to expand the market. They just have to take sales away from other automakers.â€
Alfa Romeoâ€™s recent U.S. launch of the Giulia marks the official return of the sporty Italian brand to America. Until now, Alfa Romeo offered just one model, the two-seat 4C, in small quantities. With the Giulia, Alfa Romeo has a serious competitor to the BMW 3-series and other high-end sedans. The Giulia starts at $38,990 including shipping, while the 3-series goes for at least $34,445.
Fiat Chrysler sold 555 Alfa Romeos in Marchâ€”484 of which were Giulias. The brandâ€™s total first-quarter sales were up sharply on the addition of the Giulia, including the top-of-the-line Giulia Quadrifoglio, which packs 505 horsepower.
Maseratiâ€™s sales are up 46% so far this year amid the rollout of the new Levante, a small, $73,000 SUV that made its public debut at last yearâ€™s New York International Auto Show. March sales rose 32% to 1,312 vehicles.
BMW was the best-selling luxury brand last month. The German automaker sold 31,015 vehicles, good for a 3.3% gain year-over-year. Mercedes-Benz matched BMWâ€™s growth rate but delivered 29,092 vehicles. Toyotaâ€™s (NYSE:TM) Lexus brand reported monthly sales of 27,935 vehicles, down 7.5%.
Fiat Chrysler has more Italian luxury models in the pipeline, as it tries to make up ground in the lucrative market. After delays, Fiat Chrysler expects to have a full lineup of Alfa Romeo vehicles by 2020, although it remains unclear how many cars and SUVs the brand believes it can sell. Fiat Chrysler initially aimed to invest $6 billion on eight new Alfa models, setting an ambitious global sales target of 400,000 by 2018.
This year, Alfa Romeo will get its third model. The Stelvio, a small SUV, is slated to go on sale during the second quarter. The company hasnâ€™t released pricing for the U.S. market.
Early reviews of the Stelvio, along with positive reaction to the Giulia, indicate that Alfa Romeo has what it takes to grab buyersâ€™ attentionâ€”as long as the new sedans and SUVs stand the test of time.
â€œLuxury cars are bought and sold emotionally. Youâ€™re buying Italian flair. Itâ€™s going to help them emotionally because people look at the Ferraris and Lamborghinis, the passion-fueled automobile. But it also hurts them because they will think about the reliability issuesâ€ associated with mainstream Italian cars, Harley said.
Fiat, a separate brand from Alfa Romeo and Maserati, was ranked second-to-worst in initial quality, according to the latest study from J.D. Power. The Fiat brand also finished last in J.D. Powerâ€™s Vehicle Dependability Study released in February.