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PORTRAIT OF A STRUGGLING INDUSTRY

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Fiat Abarth 500

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FIAT Auto SpA was established as an independent company in 1979, embracing the Fiat, Lancia, Autobianchi, Abarth and Ferrari marques. Fiat initially acquired 50 per cent of Ferrari, and later raised its stake to 87 per cent. Alfa Romeo was brought into the fold in 1984, and Maserati followed in 1993.
Alongside Fiat Auto, which accounts for 40 per cent of group revenues, Fiat's other diverse operations were set up as independent companies: Fiat Ferroviaria, Fiat Avio, Fiat Trattori, Fiat Engineering, Comau, Teksid and Magneti Marelli.

Giovanni Agnelli was appointed honorary president of the Fiat Group in 1996, and Cesare Romiti assumed the role of CEO. The parent company left its premises in Corso Marconi, Turin, in 1997, moving to the Palazzina Fiat of Lingotto, which had been converted into a trade fair and convention complex.

Faced with the crisis of the early 1990s, Fiat accelerated its expansion into international markets, garnering a worldwide spread which enabled it to attain more than 60 per cent of its turnover outside Italy. Increasingly aggressive competition in the late 1990s further encouraged Fiat to concentrate its attention on developing markets.

INNOVATIVE

It has also promoted the Fiat brand as innovative and suggestive of avant-garde technological solutions at affordable prices. In celebration of the company’s centenary in 1999, the Fiat logo was updated to the now familiar round version. This was also the year in which Eddie Irvine and Michael Schumacher drove Ferrari to the Formula 1 constructors’ championship, ending a decade without top honours. The following season, as Schumacher began his run of five successive titles, the Maranello team enjoyed its first F1 drivers’ championship since 1979.

Fiat’s new identity came hand in hand with a succession of new model introductions. The Seicento city car and the very versatile Multipla appeared in 1998. The Doblò, with both informal car and commercial variants, was presented at the 2000 Paris Salon.

That same year, GM bought 20 per cent of Fiat Auto in exchange for 5.1 per cent of GM stock, worth $2.4 billion at the time. The two groups planned collaboration which was to save them $2 billion. The deal included a put option obliging GM to buy up the balance of Fiat Auto should the Italian company deem it necessary.

Fiat’s Stilo, with its sophisticated technology and multiplicity of deluxe options, was launched in 2001. It was followed by the new Multipla, new Ulysse and Stilo Multi Wagon in 2002. In 2003 the new Punto with the innovative 1.3 Multijet 16v appeared on the 10th anniversary of the original model, the Barchetta sports car was revised inside and out, and the new Panda was greeted with the 2004 ‘Car of the Year’ award.

MISSION

Available since January, 2004, the Idea is Fiat’s first MPV, and is tasked with projecting the brand’s new ‘mission’. The company describes it as ‘a truly unique design: luminous with the new Sky Dome, taller for improved visibility, and with so many flexibility enhancing solutions in its interior that it is suitable for all kinds of purposes’.

Fuel saving and top performing Multijet engines have been made available for the Idea, Panda and Stilo as well as for the Punto. Evolved from the ‘common rail’ principle, the new system forms the basis for new-generation Fiat engines, beginning with the small 1.3 Multijet 16v and the 1.9 Multijet 100 bhp.
The year 2005 got off to a momentous start for Fiat, which had decided to exercise its ‘put’ option obliging GM to buy the balance of Fiat Auto shares. GM resisted, arguing that the option had been invalidated when recapitalisation of Fiat Auto diluted GM’s stake to 10 per cent. The deadlock was eventually broken by dissolution of the partnership, with GM agreeing to buy itself out for $2 billion.
Maserati, wholly owned by Ferrari, of which Fiat now holds 56 per cent, is to be transferred as soon as is practicable to Fiat Group in anticipation of close technical and commercial co-operation between Alfa Romeo and Maserati. Though Maserati will retain its industrial, technical, engine and sales links with Ferrari.

SYNERGIES

Luca Cordero di Montezemolo, now chairman of Fiat Auto as well as Ferrari, described the move as a significant step forward for Maserati and Alfa Romeo. ‘The synergies between the two marques will bring benefits to both,’ he said, ‘and will allow us to strengthen our portfolio offering in the sports car market.’

Fiat CEO Sergio Marchionne added: ‘As part of our re-launch of Fiat Auto, we need to devote a great deal of attention to the distinctiveness of our brands.’

And so, with its display at the 2005 Geneva motor show, Fiat Auto set out to engage visitors emotionally, encouraging them to look at the car in a different light – not simply as a utilitarian object but as something of symbolic value, representing a way of life and attitudes. This was essayed with a riot of metallescent finishes, colour schemes, graphics, fabrics and patterns, inspired by 1970s pop culture and said to epitomize a fresh creative force.

The New Croma, an advanced medium-large station wagon penned by Giorgetto Giugiaro’s ItalDesign, took centre-stage, marking the return of a name that won 450,000 sales for Fiat between 1985 and 1994. A host of features include a 10 cm higher than average roof line and wide-ranging permutations of engines and transmissions. A sign of the times is that the top performer has a new 200 bhp Multijet turbo diesel, allied to a sequential automatic gearbox.