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Why the man who said “motorsport is dead unless it’s electrified” re-committed Alfa Romeo to F1 | RacingLines

Why the man who said “motorsport is dead unless it’s electrified” re-committed Alfa Romeo to F1 | RacingLines

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Arguably the biggest surprise during the British Grand Prix weekend was the decision by Alfa Romeo to extend its title and livery sponsorship of the Sauber team – simply because the Milanese serpent is one of the world’s foremost performance automotive brands, and the team has hardly set the tracks alight in recent seasons – it currently languishes eighth with two points from a brace of tenth places.

The renewed deal, as outlined here

, runs for an undisclosed period and has yearly assessments, but RaceFans understands that the envisaged first block runs for three years, with options thereafter. This means the brand’s familiar red/white battle colours should be on the grid through to end-2024 at least – the end of the current regulatory period, which is, though, currently up for review.

The original Sauber-Alfa Romeo deal was the brainchild of Fiat Chrysler Automobiles boss Sergio Marchionne, who at the time of his untimely July 2018 death was also responsible for Ferrari, and hence close links between the supercar company and the entire FCA Group despite both being separately listed companies.

Marchionne bullishly forecast annual sales of 400,000. He massaged the Ferrari engine deal on behalf of Alfa Romeo deal, and hence Sauber’s role as a Ferrari Driver Academy placement team. However, despite the F1 connection the brand is underperforming in its markets, as evidenced by current sales of under 60,000 units per year.

Giuseppe Farina, Alfa Romeo, Silverstone, 1950
Formula 1’s first world champion drove an Alfa Romeo

Couple those hugely disappointing sales levels with the brand’s launching of an electrification strategy (not a rebranding) under the slogan ‘Alfa e-Romeo’ and simultaneously launching a full electric flagship model, and the obvious question to put to CEO Jean-Phillipe Imparato by RaceFans during an exclusive interview immediately after the announcement is: “Why Formula 1 and not Formula E?”

After all, for roughly the same budget as titling and livery-ing the Sauber team, Alfa Romeo could own an entire in-house FE team. Though, as Imparato notes, sister Stellantis company DS already has a presence there.

“My tribe of Alfa Romeo is coming on and my [Alfa Romeo] clubs are connected with Formula 1,” he says with a smile. “My [brand] history is connected with Formula 1, and DS is in Formula E. We are driven by the fact that we want to be consistent with our history.

“We also don’t want to overlap one [in-house] brand. So, for me it’s a completely natural decision.

The words ‘history’, ‘clubs’ and ‘tribe’ are regularly dropped into our discussion, and clearly he views the F1 link – Alfa Romeo won the first two F1 world championships, having competed in the inaugural grand prix – as absolutely crucial to the bonding and customer experience process, emphasising that there are 200 Alfa Romeo clubs globally, of which a quarter are situated in North America.

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“It’s just incredible, so if you want to respect our history; if you want to feed back [to customers], you have to add something on top to your traditional key performance areas. But I can tell you that if the return of investment [on the F1 project] would not have been in line with our expectations, we would not have said ‘yes’ [to the extension].”

Alfa Romeo marked its 111th anniversary last month

A Frenchman of Italian parentage, Imparato joined the brand from sister Peugeot – where he oversaw an impressive revival – in January. This was shortly after PSA (Peugeot, Citroen and Opel) merged with FCA (Fiat, Chrysler), which brought further brands such as Alfa Romeo and Maserati into the Stellantis fold.

He immediately announced electrification plans for what is an archetypical petrolhead brand, one whose followers were absolutely horrified when its first diesel-engined cars were launched.

“The direct benefit for me is the fact that the Formula 1 project feeds the storytelling of Alfa Romeo on the marketing side. On the country [market] mix side, what was striking in January when I joined was the answer to the first question I asked: Give me a view of the awareness of Alfa Romeo. I was surprised by the worldwide awareness.

“So, the awareness of Formula 1 feeds the country-mix of Alfa Romeo. You speak about Stellantis: I want to be the global premium brand of Stellantis. What is better for me than to be leveraging the Formula 1 awareness with Alfa Romeo?”

By premium, does he, though, mean positioned above Maserati in the Stellantis constellation?

“There is one luxury brand and that is Maserati. I don’t have this positioning, Alfa Romeo is the Italian sporty nobleness [brand] since 1910. It’s a premium brand, not an elitist brand. Obviously, Formula 1 reminds everybody that Alfa Romeo has a history in motorsport.”

Fellow Stellantis brand DS races in Formula E

I put to him that it was under his watch that Peugeot cancelled its Le Mans and World Endurance Championship campaigns, justifying the move by at the time telling Autocar magazine, “One thing is for sure: motorsport is dead unless it’s electrified,” adding, “Asking for €220m ($220m) for a future motorsport programme is completely mad.”

How does he square those comments with the Alfa Romeo deal?

There is no denial that the comments were made, just a straight answer: “Because at one point the [cash-strapped] PSA situation was very, very tricky. We had to make some hard choices. Before extending the agreement of Alfa Romeo and Sauber I made some calculations about the return on investment of the situation of Alfa Romeo in terms of medium- and long-term vision.

“I decided that Formula 1 means motorsport means the message of efficiency that can feed [brand] values. The partnership was positive with our Sauber colleague. So, that we decided to go for it is also a message that Stellantis is a very stable group.”

The comment about return on investment is intriguing, because my calculations indicate that the Sauber sponsorship deal costs around $25m per year – spread across 60,000 annual sales (maximum) that pans out at $400 per unit.

To put the numbers in perspective, consider that Ferrari is likely to operate its F1 programme at a net profit from external sponsorship and prize monies now that budget caps are in place. Renault Group spends about a quarter ($100m) that per unit. Can Alfa Romeo really afford those per unit add-on costs?

“Yes,” he says, before stressing that he is not confirming the numbers. “I confirm that the F1 project we are developing today with the colleagues of Sauber has a return on investment that is totally compatible with the target I have set in terms of in terms of profitability.”

Antonio Giovinazzi, Kimi Raikkonen, Alfa Romeo Giulia Quadrifoglio and Stelvio Quadrifoglio “Alfa Romeo Racing” special editions, 2019
Alfa Romeo is keen to associate F1 with its road car division

All well and good, but will F1 actually help the brand achieve substantial increases in global sales?

“That’s a very interesting question,” he smiles. “By the way, it’s a first question I always have. It was the same when we won the Car of the Year with the [Peugeot] 3008, it’s the same when Peugeot announced its return to WEC.

“I don’t know. I’m not relying on sales based on this type of decision. Because you never know if you will make 5%, 2%, 10% more. The only real concrete key performance indicator I have in mind is visibility. For me this is very positive provided that I’m very cautious about the fact that [any] coverage is very positive for me and it feeds the storytelling of Alfa Romeo.

“For me these two main points are key. I’m not living in a mainstream world, I’m in a premium world where volume is not the main driver – the main drivers are quality and customer experience.”

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He justifies the multi-year assessment approach on the basis that a product plan cannot be strategised in three-year blocks, saying it requires at least 10 years to devise, implement and fine-tune any details. “Three years is too short, and not consistent,” he says, adding that the strategy will be “invented together with the team.”

Clearly, then, F1 is an important positioning platform for Alfa Romeo rather than a technical development programme, particularly given that complete powertrains are bought in from Ferrari. The Alfa Romeo target market is, by definition, better informed than are buyers of humdrum ‘econoboxes’, and surely premium equals authenticity. On that basis, is the livery and badging deal with a Swiss team truly authentic?

Swiss engineering lies beneath the Italian brand

Imparato makes the point that due to having limited sponsorship firing power he had to choose his fight.

“We decided that there is only one sponsoring activity in the profit and loss [accounts] of Alfa Romeo, and this activity is Formula 1. That means I can spend everything there – I have chosen what is my fight and the extension of the agreement indicates that I selected Formula 1.

“The second part is the electrification – Alfa Romeo, where is the vibe? We don’t have a choice,” he says, referencing the previous day’s EU Commission’s decision to ban internal combustion engines from 2035 and the long-standing prior diktat that the community reduces its CO2 output by 55% by 2030.

“So, the question is no longer whether we have a choice – we do not have choice,” Imparato stresses. “So, today the challenge for Alfa Romeo is to be electrified without losing the Alfa Romeo touch,” the 54-year-old says, emphasising the last word. “If we are not electrified, [Alfa Romeo] is dead.”

He says that by 2027 Alfa Romeo will offer a full range of battery electric vehicles. “What we are working on today is: what does it means the sound of Alfa Romeo; what does it mean, the vibe of Alfa Romeo in future?”

Indeed, he says we face a “completely different automotive world in future,” and clearly he plans to position Alfa Romeo as a premium brand using F1 as a marketing pedestal ahead of a full switch to electrification by feeding off its hybrid engines.

“The question was: ‘How do we adapt [to electrification]?’ We said: “Hey, we have to change; what is the best way for me to feed storytelling based on electrification?’ That is point one; visceral experience, two; contemporary performance; third.

“The answer came naturally when I met (Sauber team boss) Frédéric Vasseur some months before: to bet on Formula 1 as a next step in terms of technological content to fit my product, because Formula 1 is electrified since [2009]. For me, in terms of rationale, it feeds the storytelling.

“This is the first point, the second point as an Alfa Romeo guy I want to prepare not only the 10 years coming but I want to send a message of stability. Second point in terms of rationale, extending this partnership with Sauber was a message to say ‘Okay, we are fighting together, we are building something for the road called the Alfa Romeo [Giulia] GTA that is a fantastic car.

“Why not try to go further [with additional such product]? That’s the second point, and the third one is not rational: That was Frédéric Vasseur, this is team leader knows the job since many years.”

These are the points, he says, that ultimately led to the contract extension.

Raikkonen’s days at the team may be numbered

Finally, will Alfa Romeo have any input into drivers given that decision time is approaching? Already there are rumours swirling around the paddock that Kimi Raikkonen will hang up his F1 helmet and race elsewhere, with Valtteri Bottas his likely replacement. With Ferrari entitled to nominate one driver, where does Alfa Romeo stand on selection for the second seat?

Imparato is absolutely clear that “This is not my job. If I want to enter this fantastic eco-system I have to be very humble.

“My job is to drive the Alfa Romeo brand, the job of Frédéric – my partner [in the venture] – is to drive the team, [so] don’t make confusion between these [roles]. He knows how to drive the team and how to choose [drivers], and there is one boss in this area. That boss is Frédéric Vasseur.”

Clearly, then it is up to Vasseur and his team in Hinwil to deliver the goods to ensure that the ‘multi-year’ agreement is not brought to a premature halt, to ensure that the F1 programme delivers in terms of brand image for Alfa Romeo and the entire Stellantis group, to ensure that the Alfisti feel the “vibe” sufficiently strongly to switch seamlessly to electrified Serpents.

That will require more than two points scored in 10 races, and Imparato surely knows it.

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July 21, 2021 at 01:06PM

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