Alfa looks for boost from Mito

Brand expects its new supermini to contribute 50 per cent of its UK sales in the year ahead

Alfa Romeo is pinning hopes on the Mito supermini to give its fortunes a much needed shot in the arm following the sudden departure of chief executive Luca de Meo this month coupled with a European sales slump triggered by the credit crunch.

Fiat Group stalwart Sergio Cravero was rapidly installed to replace de Meo and UK managing director Christopher Nicholl insisted the brand would not be distracted from its task of steering a steady course through the economic storm.

“Our job in the market doesn’t change,” he said.

Alfa Romeo’s new car sales in the UK dropped 19 per cent in 2008 to under 6,000 units as business slumped in the last quarter.

“Until September we were on track,” Nicholl said. He claimed the turning point coincided with the collapse of the Lehman Brothers investment bank, which drained financial confidence. From that point “targets changed”.

Nicholl said he would not predict how the market would pan out in 2009 but said: “Times will be tougher, on a scale we’ve not seen before.”

However, with cash-strapped consumers downsizing to more affordable models Nicholl claimed the market conditions were a good fit for the B-segment Mito.

“We are confident it will do well. The existing range will hold its volume but the Mito offers a significant opportunity. We and the dealer network need the Mito for profitability.”

Alfa Romeo expects to sell up to 12,000 new cars in the UK this year with the Mito accounting for at least half that volume. The brand admitted some customers would switch to the supermini from the larger, seven year-old 147, which reaches the end of its run in 2009, but Nicholl was confident the new model will take a 1 per cent share of the increasingly dominant B-segment.

But for Alfa Romeo – a niche brand that had long seen its aspirations to move upmarket thwarted by its retail dependence on parent Fiat – the emphasis is on quality, not quantity.

Damian Dally, marketing operations manager, said: “We were very volume driven in our route to market. We were sold in a very Fiat way.”

In the last three years the brand has overhauled its network, which now includes prestige partners such as HR Owen and Westons.

Nicholl said 70 per cent of the network, which Alfa has trimmed from about 80 to 46 outlets, had changed since 2006.

He said the network had been “a mixed bag”, made up of Alfa Romeo enthusiasts and Fiat dealers to whom the carmaker failed to give a clear strategy.

Although Nicholl admitted there were now fewer dealerships shared with Fiat, he claimed it had not been a deliberate policy to phase them out.

“What is critical is the attitude of dealers,” he said.

“The philosophy of the brand is at the forefront.”

He said the retail focus was now on customer satisfaction not price, with discount deals avoided. “A quick cash and carry is not our business.”

He claimed the residual value performance of the 147 had been “destroyed by discounts” and the brand is determined the same will not happen to the Mito.

Nicholl said initial Cap Monitor forecasts put the Mito’s RVs on a par with those of its main rival, the Mini, and ahead of other superminis such as the Volkswagen Polo, Ford Fiesta and Toyota Yaris.

With prices starting from £10,745 for the 1.4-litre 16V Turismo, Mito product manager Ian Mitchell said: “Alfa Romeo has delivered a sensible, practical proposition” while remaining true to its sporty traditions.

“Alfa’s evocative heritage and the Mito’s good looks mark it out as a genuine contender within a competitive sector,” said Nicholl.