
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, June 23, 1990                   TAG: 9006230230
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

AUTO MARKET TO STAY SOFT, IMPORTER SAYS

Although new car sales are slow, Darrell Davis, the president of Alfa Romeo Distributors of North America, said his dealers have to wait four or five weeks for some of new models from the factory at Milan, Italy.

Alfa Romeo, a sporty car with a French-Italian origin 80 years ago, is selling in a tough market against many dealer incentives and "a laziness in the economy," Davis said in Roanoke Friday.

His 170 dealers aren't hurt by the soft market, Davis said. That's because they have a new model to sell, costing as much as $29,500 with leather upholstery and a free maintenance provision for the first three years or 36,000 miles. All the owner has to do is put in gas.

However, Davis expects the auto market will be flat for the next year. Consumers have received "liberal incentives" for five years "and everybody who needs a car has bought it."

Consumer confidence is pretty good, he said, but would-be buyers have a wait-and-see attitude. They're concerned about the government's bailout of the savings and loan industry and its effect on the federal deficit.

Davis' organization, a joint venture between Chrysler and Fiat, owner of Alfa Romeo, combines an established car line with Chrysler's marketing experience. Davis had been general sales manager during his 25 years with Chrysler.

Joint ventures have become common in the auto industry with the combinations of VW with Spain's Seat, Ford and Jaguar, and General Motors with Saab. As the cost of developing new models grows more expensive, Davis said he expects more joint operations. Consolidated companies are able to amortize costs and work from a broader base.

Alfa Romeo, whose cars are priced from $20,950 to $29,500, is intended to compete with BMW, Saab and Volvo, he said.

An Alfa Romeo buyer, according to his company's demographic studies, is a professional person in the late 30s, earning at least $75,000 a year, "a guy looking for something a little more sporty, more distinctive," Davis said.

Alfa Romeo is not a volume seller. The company expects to sell 4,500 to 5,000 cars this year and jump to 12,000 or 13,000 in 1991. Next year's projection is about 50 percent higher than the best total in the past.

by CNB