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  • irishtimes.com - Posted: March 5, 2013 @ 10:48 am

    Geneva LiveBlog: Mercedes AMG & Alfa both chasing expansion

    Neil Briscoe

    The new Mercedes-Benz A45 AMG hot hatch is not just Merc’s first foray into the world of hot five doors, and nor is it merely the possessor of the most powerful production four-cylinder engine. Well, it is both of those things, but it’s also so much more. It’s the marker post in the ground that kicks off a massive expansion of AMG, Mercedes’ in-house high performance arm. The AMG brand has already come a long, long way from its roots in the German town of Affalterbach when Hans Werner Aufrecht and Erhard Melcher started tweaking Merc saloons for racing purposes. AMG now has 22 versions of Mercedes cars now on sale, and the brand is looking to expand its portfolio to a whopping 30 models by the time of its 50th birthday in 2017.

    “We are continuing our unique model initiative with our new AMG high-performance vehicles,” states Ola Källenius, CEO of Mercedes-AMG GmbH. “The new A 45 AMG, our first vehicle featuring a four-cylinder turbo engine in the compact class, is representative of the “AMG Performance 50″ growth strategy which was adopted in 2012 with the aim of expanding the model range from 22 to 30 vehicles by the time of our 50th birthday.”

    It’s the A45 and it’s 2.0-litre turbo engine that will be the cornerstone of AMG’s plans. The car was unveiled at Geneva by R&B star Usher (seen above with the car and Ola Källenius), a clear signal that AMG wants to drive down the age of its customer base. The engine, the first four-pot that AMG has ever created, will swiftly overtake (if the plans all work out) AMG’s traditional big V8 engine as the best-selling tweaked Merc unit. It’ll have to, as AMG is not only pursuing an aggressive expansion plan, but it also wants to cut its average engine Co2 emissions down to 200g/km by 2017. Its newly developed E-Cell high performance electric drivetrain may have some heavy lifting to do in that regard, seeing as AMG has also just been given overall authority for all of Mercedes’ future V12 engines…

    Four wheel drive, another new AMG departure, will also be key to the new plan. The A45 AMG has all-wheel-drive, as does, optionally, the new E63 AMG saloon and estate, and all-wheel traction is being seen as a significant advantage for AMG as it looks to grab sales in the likes of the Russian, Middle-Eastern and American ‘snowbelt’ markets.

    And AMG isn’t the only brand at Geneva looking for a dramatic expansion in its sales. While AMG’s expansion from 20,000 sales a year to 30,000 looks ambitious enough, even given the brand’s huge recent global success, it’s as nothing compared to Sergio Marchionne’s plans for Alfa Romeo.

    Alfa is using Geneva to show off the full production version of its gorgeous little 4C sports car. With a super-light all-carbon chassis and a new version of the 230bhp 1750 TBI turbo engine doing the pushing, it’s already looking like one of the out and out stars of 2013. And it is just the beginning, if Marchionne’s plans are to be believed.

    From being the problem child of the Fiat group right now, Alfa is destined to triple its global sales by in just three years, and expand into new and lucrative markets too.

    To do that, Marchionne is going to sink €1-billion into a dramatic new investment plan to create a new Alfa range (which has shrunk down in recent years to just the Mito small car and the Giulietta hatchback) including new rivals for the BMW 3 and 5 Series and a brace of compact SUVs.

    Trebling sales by 2016 would put Alfa sales at around 300,000 cars a year – a massive increase on the desultory 92,000 cars it sold last year and a pretty hefty increase even on Alfa’s record sales year of 200,000 cars back in 2000. Even then, it’s a long way shy of the 1.5-million cars that rivals BMW and Audi shift every year and already industry watchers are putting on their sceptical expressions that Alfa can pull this off.

    But it has to. The European car market is continuing to contract and that’s putting the squeeze on Fiat’s finances, notwithstanding the global and US successes of its Chrysler, Dodge and Jeep brands. Marchionne needs a big sales hit, and Alfa is the only brand in his portfolio with the premium badge appeal to pull that off. Fiat will continue to be squeezed in Europe by the Koreans, Skoda and Dacia as the affordable, mainstream car market becomes ever more cut-throat, so expanding upwards and outwards is the only viable option.

    There’s no doubting the appeal and affection that the Alfa brand enjoys, but whether that’s enough to fuel such a dramatic global expansion for a brand that has consistently miss-fired since Fiat bought it in 1986 remains to be seen. Marchionne took a dramatic bet on turning around Chrysler three years ago, and that payed off big time. But turning Alfa from basket case into cash cow will be his most dangerous gamble yet.

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