Buying New in the USA, plus other random thoughts....

["Ian Preece" <ian_preece@domain.elided>]

The recent postings about who would actually buy a new 156 (for example) =
if
they were available in the US, are interesting for a number of reasons,
especially where I sit, over the pond in the UK
=2E
The first, and I'm guessing a little here, is that most prospective
purchases
would be financed personally, as the concept of 'company' cars provided f=
or
private use is not as widespread in the US as it is in Europe. This must
make a
significant difference.

In the UK, the company car culture was at it's hight in the early 90's.
Successive governments had made high earnings unattractive to most middle
management workers through high taxation, both direct and indirect. One
solution was to provide a company car as a tax 'perk' or incentive. Gener=
ous
employers even provided free fuel. The car supplied often indicated your
perceived worth to the company, status and level in the pecking order. It=
's
funny to think back now, but having alloy wheels or a sun roof were as
crucial
as how big your office space was and whether you had a personal secretary=
!

With this situation, fleet buyers responsible for providing these cars we=
re
king of the hill, able to pull off the most amazing deals with
manufacturers/suppliers, to get their cars on the road. The downside was
that
the employee got a free car, but had no or little choice, therefore being
given
something to drive (I used to do 30k miles a year) which might have been
their
worst nightmare. Lucrative job advertisements offered 'Quality company ca=
r'
or
even the manufacturers name. BMW were very sought after, they implied a
certain
status.

Secondly, another angle here was the financing. The concept of leasing
became
very popular, rates based on the residual value of the car after a period=
 of
time and an agreed mileage limit. Cars with high residuals were on pole
position. Read BMW and Merc.

It was not suprising that cheapest cars to lease were home grown such  as
F*ord
and R*ver, and the usual Japanese suspects like T*yota.
The private market, people spending their own money, was relatively small=
,
and
still is to some extent. Mostly, it was made up of mature folk, perhaps j=
ust
or
nearing retirement, looking for something cheap to run, reliable, with a
degree
of comfort. Honda scored high marks with the 'grey economy'. The 'second
car'
for the wife was also based on high volume, low price, again F*ord and
N*ssan
taking large market share.

With this background, Alfa Romeo didn't stand a chance. Terrible reputati=
on
for
corrosion, thanks mainly to the beloved 'Sud, limited dealer network (how
far
will you travel to get it serviced properly), appalling residual values
(When I
tried to buy a new Arna, and trade in my 'Sud, which was OK, the local
dealer
refused part exchange, suggesting I would get a better price privately), =
and
of course the quality issue.

This was as good as saying that you couldn't really justify buying a new
Alfa
in the UK, which amounts to not being able to buy one, full stop.
Sound familiar?

The position now has changed, but is still very much based on how you
finance
your new car. The true company car has almost died a death, due to, yeah =
you
guessed, taxation. Employers now tend to give people an 'allowance' to
provide
their own cars. This means much more choice, a more aggressive market and
higher
competition. To compete, Alfa had to overcome it's poor image, crap
residuals
and iffy quality, which it is doing, but it takes time to repair the dama=
ge.

Most of the sales in Europe of the 156/166 are still company based, not
private
sales in the true sense. You can now lease a new 166 2.5V6 for about $900=
 a
month, based on a three year contract and a maximum of 20k miles per year
(including
maintenance charges). After three years you hand it back, or start   agai=
n.
You
 never own it unless you pay off the residual value. In a land where we a=
re
compelled to use the motor car, 20k miles is a joke.

More disturbingly, the people who define the running costs have some very
persuasive arguments. The following is an extract from a UK based site, w=
ith
commentary about how the 166 shapes up to the opposition:

- ----------
    "ALFA'S running costs and residual values have traditionally languish=
ed
at the bottom of the pack, particularly compared with German rivals. One
look at our running costs table reveals the same is true of the 166, thou=
gh
the differences are not as clear cut as before. In fact, the Alfa makes a
surprising showing that speaks volumes for the progress Alfa GB has made =
in
the fleet market.
In particular, it is maintenance costs that provide the biggest surprise;=
 at
3.33ppm, the Alfa actually undercuts both the Audi A6 2.8 quattro and BMW
528i SE. Sadly, though, the same praise can't be heaped on the 166's fuel
consumption. At 22.6mpg on the combined cycle, it falls a long way behind
the class-leading Volvo S80 2.9 (29.1mpg), BMW 528i SE (28.5mpg) and Audi=
 A6
quattro (26.4mpg).
Coupled with the heavy depreciation that comes from a residual value
prediction of just 36% of cost new after three years/60,000 miles (or
=A312,650) according to CAP Future Residual Values, the Alfa's total runn=
ing
costs are the poorest of our selection of rivals at 47.51ppm. Yet
surprisingly the 166 is only a fraction of a penny behind the Audi, large=
ly
thanks to keen pricing. At =A329,171 it is over =A32,200 less expensive t=
han the
A6 2.8 quattro.
Nevertheless, such figures are almost academic when they fall more than f=
ive
pence per mile behind the BMW - equating to an extra =A33,000 over three
years/ 60,000 miles - making it clear the Alfa will not be bought for cos=
t
reasons."
- --------------

So, no medals from the bean counters then. A predicted value of 36% after
three years? You may as well throw your money strait  down the john...


OK, what's all this got to do with you out there in digest land?

Well, even where you can get your hands on a new Alfa locally, the privat=
e
buyer is still staying away from the party. It's still about putting your
money
where your mouth is. As Alfa's return continues, no doubt this will chang=
e,
but
only gradually I think. The 166 is aimed squarely at the business, senior
management sector in direct competition with BMW, Audi and Merc. I doubt =
if
many sales are for private individuals. The 156 and to some extent the GT=
V
are
aimed at the thrusting young turks of business, not only saying something
about yourself,
but your company as well. You remember the old adage, 'no one ever got fi=
red
for buying IBM', well as long as BMW retain their market share, it still
looks
like only crazies buy Alfa. (I'm happy to be crazy).

Perhaps the trick is to wait three years and import a dirt cheap Alfa fro=
m
Europe?

Another thread. What you gonna write on the digest if you buy a new 156? =
I
took
it for a drive, it was very good, I put it back in the garage. End of sto=
ry.

The experience will be worthwhile, but lets face it, most folk on the dig=
est
enjoy getting their hands dirty, or figuring out the Latin wiring loom or
making it stop, go and corner better, and sharing said experience with li=
ke
minded folk. Some may say it's like mountaineering, why do we do it? Beca=
use
they're there, and need to be conquered, tamed, explored. You won't get t=
he
same buzz with a new Alfa. There's no challenge.

Ah yes, that's what it's all about, isn't it? Taking something intrinsica=
lly
superior, but flawed, and getting the best from it? And proving to the
nonbelievers that it can be done?

Let me give you an analogy:
I have an old Fuji SLR camera. Totally manual, no electronics. When I tak=
e a
good, crisp photo' with a 300mm lens at the race track, I feel really  go=
od.
If
 I had a modern, predictive auto focus, multi mode Nikon, I wouldn't get =
the
same sense of achievement. See what I mean?

So, don't be too upset if you don't have the opportunity of buying a nice
new
Alfa. I reckon, on a bangs per buck basis, your smile will be just as wid=
e
in
your V6 Milano, as opposed to a V6 156, possibly even wider. After all, y=
our
Milano will be rear wheel drive.......

BTW, I always thought Ford stood for fix or repair daily.

Best Regards,
Ian

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