[alfa] the old ciao America story redux

[Pottree@xxxxxxx]

In a message dated 2/29/2004 2:10:23 PM Pacific Standard Time, 
owner-alfa-digest@domain.elided writes:
Alfa left the US market in 1995 because they sold only about 500 cars 
in all of North America in that year. The reason was partly because of 
Alfa's reliability and rust reputation, partially because the Mazda 
Miata was stealing potential Alfa Spider sales, and partially because 
Alfa Romeo simply had nothing to sell here. ...
The reason ALFA left our shores is, like so many things, open to a variety of 
interpretations.  For example, at a time when passenger car sales as % of new 
vehicles was dropping, all they had on offer was cars.  Very important, too, 
was incoming OBDII requirements, which meant they were looking at a very heavy 
new investment and a lot of dealer support, which was always a very weak 
point in ALFA's USA chain.  

Could ALFA models ever be competitive in their USA segments?  Sure, ALFA now 
has some beautiful cars, but they will not roll of out the showrooms (were 
there any showrooms) all by themselves; unlike other parts of the world, in the 
USA it is necessary to very aggressively SELL the cars, and the starting points 
are LOTS OF COSTLY PAID MEDIA ADVERTISING (just like the successful brands 
use) and GREAT DEALER SUPPORT that would allow the customers, ultimately, to 
feel good about owning an ALFA, rather than like chumps.  

Both of these key MARKETING aspects were typically ignored by ALFA, and 
later, by FIAT in the USA.  It seemed from our perspective that either they were 
actually broke and couldn't afford to play with the big boys, or they had a 
serious attitude problem, or they just couldn't give up believing, in the fine 
tradition of engineers, that if the product was good people would naturally and 
spontaneously find it and buy it because of its own characteristics, rather 
than because they were convinced and coerced into the purchase, then cajolled 
into enjoying it, and developed ON PURPOSE to spread the good word and by the 
way, buy another product in a couple of years.  All this was lost on the sellers, 
and if they never truly internalized these lessons, or if they really can't 
afford to operate in the USA, then they are right not to be here and not to 
return.  Sorry to say.

You could say that all other qualities aside, the main difference that made 
BMW very desirable in the USA and ALFA a loser was the spending at the ad 
agency that thought of the Ultimate Driving Machine campaign and the media program 
that got it out loud, clear, and consistently for such a long time.  It 
certainly wasn't the products.  Nobody knows the product or what to think about it 
until you tell them... and then nobody knows the company until they have an 
experience of it; a bad experience is typically communicated to 10 other people, 
and it snowballs from there.  The viral on good experiences isn't as rapid, 
but it is a strong pull rather than a death knell.  

So, all that ALFA needs to succeed in the USA is a great dealer network that 
treats its customers as wells as Lexus dealers do, or better... and a boffo ad 
campaign that runs in all the right places all the time... and, of course, 
the money to support them until the sales cycle spins out.  

IOW, the right attitude together with the wherewithal.  

With these, you can make a nice business selling poor or very ordinary 
products (I will not mention any names, but you know who they are).  Without these, 
you cannot succeed even with a terrific product (ditto).

As was mentioned, the margin on new car sales is quite small; it is really 
the back end (parts and service) that you are trying to cultivate.  This holds, 
I'd guess, for all cars, but it is certainly the rule for normal-use cars.  
For very, very expensive, prestige brands, such as Ferrari, the absolute amount 
of the margin may be high enough so that they can operate above the fray, 
profiting despite lousy service and next to no advertising, and survive with a 
small number of unit sales.  But for regular-market players, the numbers just 
can't be there for a few hundred or a few thousand units.  It MUST be a volume 
business because the opportunity costs are stratospheric.

Charlie
LA, CA, USA
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