Fiat

From WOI Encyclopedia Italia


Fiat S.p.A. (Template:Nyse) is an automobile manufacturer, financial and industrial group based in Turin, Northern Italy.

The name is the acronym of Fabbrica Italiana Automobili Torino (Italian Car Factory of Turin), founded by Giovanni Agnelli in 1899. His grandson Gianni Agnelli was Fiat chairman from 1966 until his death on January 24, 2003, when he was succeeded by his brother Umberto Agnelli. After Umberto Agnelli's death on May 28, 2004, Luca Cordero di Montezemolo was named chairman, but Agnelli heir John Elkann became vice chairman at age 28 and other family members are on the board. At this point, CEO Giuseppe Morchio immediately offered his resignation. Sergio Marchionne was named to replace him on June 1, 2004.


Contents

History and activities

Fiat Uno rally car
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Fiat Uno rally car

The group's activities were initially focused on the industrial production of cars, industrial and agricultural vehicles. Over time it has diversified into many other fields, and the group now has activities in a wide range of sectors in industry and financial services. It is Italy's largest industrial concern. It also has significant worldwide operations, operating in 61 countries with 1,063 companies that employ over 223,000 people, 111,000 of whom are outside Italy. Fiat built the famous Lingotto car factory, opened in 1923.

Fiat was to make military machinery and vehicles during World War II for the Italian Army and Air Force. Fiat made fighter aircraft, which was one of the most common Italian aircraft used along with the Savoia-Marchetti, and also made light tanks and armored vehicles. These machinery were weak compared to some of the German and Soviet machinery, but were still used often.

Fiat corporation, starting from the late 1960s, has bought (or gained control of) a wide range of companies, including:

  • Agricultural and construction vehicles - Fiat group also owns CNH Global (which includes: Case Construction, Case IH, Flexi-Coil, Kobelco, New Holland, New Holland Construction, and Steyr); and Fiat-Hitachi Construction.
  • Buses - produced with the Fiat, Iveco or Irisbus names.
  • Aviation - aircraft and related components were produce by FiatAvio (now Avio, an independent company), which also controls EVL, a space industry.
  • Military vehicles, see Ariete
  • Vehicle components - the major Italian component maker Magneti-Marelli is owned by Fiat, and in turn owns the other brands Carello, Automotive Lighting, Siem, Cofap, Jaeger, Solex, Veglia Borletti, Vitaloni and Weber; other accessory brands include Riv-Skf and Brazilian Cofap.
  • Steelmaking and metallurgy - Fiat owns Teksid and produces machines for the industry (also for car factories) with Comau (now Comau Systems), which bought the American Pico, Renault Automation and Sciaky.
  • Publishing - notably, Fiat group also owns important editorial brands, like La Stampa (created in 1926 for the famous newspaper), Itedi, Italiana Edizioni. Some national and local newspapers are owned or otherwise controlled by the different companies. A specialised advertising space reseller is Publikompass, supported by the Consorzio Fiat Media Center.
  • Financial services - An important insurance company, Toro Assicurazioni, allows Fiat to control a relevant part of this market (also with minor companies like Lloyd Italico, Augusta Assicurazioni) and to interact with some associated banks.
  • Construction - Ingest Facility and Fiat Engineering work in various fields of construction, while IPI is a mediation company that also deals with the management of real estate properties.
  • Information technology - Fiat is present in IT fields and in communications with ICT - Information & Communication Technology, Espin, Global Value, TeleClient, Atlanet.
  • Leisure The group owns the Sestriere skiing facilities (being this village on Alps a creation of Agnelli family).

In the 1970s and 1980s, the company became a pioneer in the use of industrial robotics for the assembly of motor vehicles. Fiat assembly plants are among the most automated and advanced in the world.

  • Other services Fiat Gesco, KeyG Consulting, Sadi Customs Services, Easy Drive, RM Risk Management and Servizio Titoli are minor companies that work for public services, delivering services in economics and financial fields.
Fiat Group Revenues by Industry in 2004
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Fiat Group Revenues by Industry in 2004
Other activities include industrial securitisation (Consorzio Sirio), treasury (Fiat Geva), Fiat Information & Communication Services.

Fiat supports the Fondazione Giovanni Agnelli, an important foundation for social and economic research. Palazzo Grassi, a famous ancient building in Venice, now a museum and formerly supported by Fiat, was eventually sold to the Venice casino in January 2005.

Fiat has recently begun sponsoring the Jamaican bobsledding team and promoting this sponsorship through commercials. Many like Jamaican athletes because they see them as underdogs and as people who enjoy life. While Volvo sponsors golf, Mercedes tennis, and Hyundai soccer, Fiat is trying to look unique and more light-hearted. Further, the team is relatively cheap to sponsor.5

The group is present in many countries, not only in the West. Notably, it was one of the first companies to build factories in Soviet-controlled countries, with the best known examples in Vladivostok, Kyiv and Togliattigrad. The Russian government later continued the joint venture under the name AutoVAZ (known as Lada outside the former USSR). The venture was most notable for the Lada Riva. Fiat also has a subsidiary in Poland at Tychy, (formerly called FSM) where Fiat's small cars (the 126, Cinquecento and now Seicento) are made. Fiat also has factories in Argentina, Brazil, and Italy. In addition, its cars are produced through licensing and joint-venture agreements in China, Egypt, France, India, South Africa, Turkey, and Vietnam.6 Local variants of Fiats are produced at these factories as well as a world car, the Palio. As of 2005, the company holds the first position in the Brazilian automobile market with a market share close to 25%.

Fiat's headquarters in Turin, converted from the company's first mass-production factory, the Lingotto (completed in 1923).1
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Fiat's headquarters in Turin, converted from the company's first mass-production factory, the Lingotto (completed in 1923).1

Fiat has articulated that it wishes to focus on expanding into third-world markets because, in the words of former chairman Paolo Fresco, “those are the only markets where you can expect growth.”7 And it is true that Fiat’s specialization in smaller cars puts it at an advantage in those markets, but cars sold in third-world countries tend to be much simpler than those sold elsewhere (e.g., most lack air conditioning), and thus require much less money to develop.

After Fiat ceased importing cars into the United States in 1984,and Australia in 1989 however, they continued to be imported into Canada, as did Soviet versions of Fiat models.

History

Giovanni Agnelli led the company until his death in 1945, while another man, Vittorio Valletta, administered the day-to-day activities of the company. In 1903, Fiat produced its first truck.8 In 1908, the first Fiat was exported to the US.9 That same year, the first Fiat aircraft engine was produced. Also around the same time, Fiat taxis became somewhat popular in Europe.10 By 1910, Fiat was the largest automotive company in Italy—a position it has retained since. That same year, a plant licensed to produce Fiats in Poughkeepsie, NY, made its first car. This was before the introduction of Ford’s assembly line in 1913. Owning a Fiat at that time was a sign of distinction. A Fiat sold in the US cost between $3,600 and $8,600 ($73,909 to $176,561 today). Compare this to the $825 ($17,000 today) Henry Ford charged for his first Model Ts in 1908.11 However, upon the entry of the US into World War I in 1917, the factory was shut down as US regulations became too burdensome. At the same time, Fiat had to devote all of its factories to supplying the Allies, producing aircraft, engines, machine guns, trucks, and ambulances. After the war, Fiat introduced its first tractor.12 By the early 1920s, Fiat had a market share in Italy of 80%.13 In 1921, workers seized Fiat's plants and hoisted the red flag of communism over them. Mr. Agnelli responded by quitting the company, retiring to private life, and letting the workers try to run the company. Shortly afterward, 3,000 of them walked to his office and asked him to return to the helm—-a request to which he reluctantly agreed. In 1922, Fiat began to build the famous Lingotto car factory--the largest in Europe up to that time--which opened in 1923. It was the first Fiat factory to use assembly lines. Fiat made military machinery and vehicles during World War II
Fiat Auto's acquisitions over time.
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Fiat Auto's acquisitions over time.
for the Italian Army and Air Force. Fiat made fighter aircraft, which was one of the most common Italian aircraft used along with the Savoia-Marchetti, and also made light tanks and armored vehicles. These were weak compared to some of the German and Soviet counterparts, but were still used often. In 1945 — the year Hitler’s ally Mussolini was overthrown as leader of Italy - the Italian Committee of National Liberation removed the Agnelli family from leadership roles in Fiat because of its ties to Mussolini’s government. These were not returned until 1963, when Giovanni’s grandson, Gianni took over as general manager until 1966 and as chairman until 1996.14

Gianni Agnelli

Among Gianni's first steps after he gained control of Fiat was a massive reorganization of the company management, which had previously been highly centralized, with almost no provision for the delegation of authority and decision-making power. Such a system had worked effectively enough in the past but lacked the responsiveness and flexibility made necessary by Fiat's steady expansion and the growth of its international operations in the 1960's. The company was reorganized on a product-line basis, with two main product groups--one for passenger cars, the other for trucks and tractors--and a number of semi-independent division and subsidiaries. Top management, freed from responsibility for day-by-day operations of the company, was able to devote its efforts to more far-reaching goals. In 1967, FIAT made its first acquisition when it purchased Autobianchi. Then, in 1969, it purchased controlling interests in Ferrari and Lancia. According to Newsweek in 1968, FIAT was “the most dynamic automaker in Europe . . . [and] may come closest to challenging the worldwide supremacy of Detroit." In 1967 Fiat, with sales amounting to $1.7 billion, outstripped Volkswagen, its main European competitor; in 1968 Fiat produced some 1,750,000 vehicles while its sales volume climbed to $2.1 billion ($11.5 billion today). At the time, Fiat was a conglomerate, owning Alitalia Airlines, toll highways, typewriter and office machine manufacturer, electronics and electrical equipment firms, a paint company, a civil engineering firm, and an international construction company. That same year, Fiat acquired Citroën--one of France’s three major automakers at the time. However, in 1976, it sold the company. Following up on an agreement that Valetta had made with Soviet officials in 1966, Agnelli constructed a Fiat plant in the new city of Togliattigrad on the Volga that went into operation in 1970. On his initiative, Fiat automobile and truck plants were also constructed in industrial centers of Yugoslavia, Poland, Bulgaria, and Romania. In 1979, the company became a holding company when it spun off its various businesses into autonomous companies, one of them being Fiat Auto. That same year, sales reached an all-time high in the United States, corresponding to the Iranian Oil Crisis. However, when gas prices fell again after 1981, Americans began purchasing sport utility vehicles, minivans, and pickup trucks in larger numbers (marking a departure from their past preference for large cars). Also, Japanese automakers had been taking an ever-larger share of the car market, increasing at more than half a percent a year.
Fiat has experienced a crisis of leadership in recent years.
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Fiat has experienced a crisis of leadership in recent years.
Thus, in 1984, Fiat and Lancia withdrew from the American market. In 1989, it did the same in the Australian market.

In 1986, Fiat acquired Alfa Romeo from the Italian government. In 1992, two top corporate officials in the Fiat Group were arrested for political corruption.15 A year later, Fiat acquired Maserati. In 1995 Alfa Romeo exited the US market. Maserati re-entered the US market under Fiat in 2002. Since then, Maserati sales there have been increasing briskly.

Paolo Fresco

Paolo Fresco was brought in as chairman of Fiat in 1998. The hope was that the veteran of General Electric would bring more of an emphasis on shareholder value to Fiat. By the time he took power, Fiat's market share in Italy had fallen to around 41%16 from around 62% in 1984.17 However, a John Welch-like management style would be much harsher than that used by the Italians (e.g., precarious versus lifetime employment). Instead, Fresco focused on offering more incentives for good performance, including compensation using stock options for top and middle management. However, his efforts were frustrated by union objections. Unions insisted that pay raises be set by length of tenure, rather than performance. Another conflict was over his preference for informality (the founder, Giovanni Agnelli, used to be a cavalry officer). He often referred to other managers by their first name, although company tradition obliged one to refer to others using their titles (e.g., "Chairman Fresco"). The CEO of the company, Managing Director Paolo Cantarella, ran the day-to-day affairs of the company, while Fresco determined company strategy and especially acted as a negotiator for the company. In fact, many speculated the main reason he was chosen for the job was to sell Fiat Auto (although Fresco fervently denied it).18 In 1999, Fiat formed CNH Global by merging New Holland NV and Case Corporation.


Gianni Agnelli

Among Gianni's first steps after he gained control of Fiat was a massive reorganization of the company management, which had previously been highly centralized, with almost no provision for the delegation of authority and decision-making power. Such a system had worked effectively enough in the past but lacked the responsiveness and flexibility made necessary by Fiat's steady expansion and the growth of its international operations in the 1960's. The company was reorganized on a product-line basis, with two main product groups--one for passenger cars, the other for trucks and tractors--and a number of semi-independent division and subsidiaries. Top management, freed from responsibility for day-by-day operations of the company, was able to devote its efforts to more far-reaching goals. In 1967, FIAT made its first acquisition when it purchased Autobianchi. Then, in 1969, it purchased controlling interests in Ferrari and Lancia. According to Newsweek in 1968, FIAT was “the most dynamic automaker in Europe . . . [and] may come closest to challenging the worldwide supremacy of Detroit." In 1967 Fiat, with sales amounting to $1.7 billion, outstripped Volkswagen, its main European competitor; in 1968 Fiat produced some 1,750,000 vehicles while its sales volume climbed to $2.1 billion ($11.5 billion today). At the time, Fiat was a conglomerate, owning Alitalia Airlines, toll highways, typewriter and office machine manufacturer, electronics and electrical equipment firms, a paint company, a civil engineering firm, and an international construction company. That same year, Fiat acquired Citroën--one of France’s three major automakers at the time. However, in 1976, it sold the company. Following up on an agreement that Valetta had made with Soviet officials in 1966, Agnelli constructed a Fiat plant in the new city of Togliattigrad on the Volga that went into operation in 1970. On his initiative, Fiat automobile and truck plants were also constructed in industrial centers of Yugoslavia, Poland, Bulgaria, and Romania. In 1979, the company became a holding company when it spun off its various businesses into autonomous companies, one of them being Fiat Auto. That same year, sales reached an all-time high in the United States, corresponding to the Iranian Oil Crisis. However, when gas prices fell again after 1981, Americans began purchasing sport utility vehicles, minivans, and pickup trucks in larger numbers (marking a departure from their past preference for large cars). Also, Japanese automakers had been taking an ever-larger share of the car market, increasing at more than half a percent a year.
Fiat has experienced a crisis of leadership in recent years.
Enlarge
Fiat has experienced a crisis of leadership in recent years.
Thus, in 1984, Fiat and Lancia withdrew from the American market. In 1989, it did the same in the Australian market.

In 1986, Fiat acquired Alfa Romeo from the Italian government. In 1992, two top corporate officials in the Fiat Group were arrested for political corruption.15 A year later, Fiat acquired Maserati. In 1995 Alfa Romeo exited the US market. Maserati re-entered the US market under Fiat in 2002. Since then, Maserati sales there have been increasing briskly.

Paolo Fresco

Paolo Fresco was brought in as chairman of Fiat in 1998. The hope was that the veteran of General Electric would bring more of an emphasis on shareholder value to Fiat. By the time he took power, Fiat's market share in Italy had fallen to around 41%16 from around 62% in 1984.17 However, a John Welch-like management style would be much harsher than that used by the Italians (e.g., precarious versus lifetime employment). Instead, Fresco focused on offering more incentives for good performance, including compensation using stock options for top and middle management. However, his efforts were frustrated by union objections. Unions insisted that pay raises be set by length of tenure, rather than performance. Another conflict was over his preference for informality (the founder, Giovanni Agnelli, used to be a cavalry officer). He often referred to other managers by their first name, although company tradition obliged one to refer to others using their titles (e.g., "Chairman Fresco"). The CEO of the company, Managing Director Paolo Cantarella, ran the day-to-day affairs of the company, while Fresco determined company strategy and especially acted as a negotiator for the company. In fact, many speculated the main reason he was chosen for the job was to sell Fiat Auto (although Fresco fervently denied it).18 In 1999, Fiat formed CNH Global by merging New Holland NV and Case Corporation.

Recent events

Over the years, Fiat's workforce has become much more international.
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Over the years, Fiat's workforce has become much more international.
Over time, most automotive companies around the world have become holding companies of foreign as well as domestic competitors. For example, the US company General Motors controls Japan’s Isuzu, Subaru, and Suzuki as well as Sweden’s Saab (also known as SAAB). Fresco signed a joint-venture agreement in 2000 under which GM acquired a stake in Fiat. This made it appear as if Fiat was next, although GM has made joint ventures with other companies (such as Toyota) without acquiring them. Nevertheless, Fiat did not see the GM partnership as a threat, rather as an opportunity to off-load its automotive business. Fiat had put a provision into its contract with GM that stipulated the company could force GM to acquire its automotive business. If GM balked, it would be forced to pay a penalty of $2 billion. When Fiat tried to sell GM the company, GM chose the penalty. On May 13 2005 GM and Fiat officially dissolved their agreement, and Fiat is now courting Ford.19 The current CEO views alliances such as these as the deciding factor of the future success of Fiat.

As part of the recent divestitures, in 2003 Fiat shed its insurance sector, which it was operating through Toro Assicurazioni to the DeAgostini Group. In the same year, Fiat sold its aviation business, FiatAvio to Avio Holding. In February 2004, the company sold its interest in Fiat Engineering, as well as its stake in Edison.

Fiat faces a multitude of threats, including rising steel prices (up 68% between January and October 2004),20 a strong Euro, and increased competition from Japanese and Korean car manufacturers in Europe. Although the light-vehicle market share of Japanese and Korean automakers in Europe is less than in the US (12.5% and 3.9%, respectively versus 30% and 3.9% in the US), it has been increasing steadily at about a half a percent a year.21 Fiat has also suffered operating losses for four years now.


Fiat Car Model Description and Photos

List of Fiat models since 1899

Fiat S.P.A.
Current models Albea | Barchetta | Croma | Doblò | Ducato | Fiorino | Grande Punto | Idea | Marea | Multipla | Nuova 500 | Nuova Panda | Palio/Palio Weekend | Punto | Scudo | Sedici | Seicento | Siena | Strada | Stilo | Ulysse
Historic models 1 | 1T | 3.5 CV | 4 HP | 8V | 10 HP | 12 HP | 124 | 125 | 126 | 127 | 128 | 130 | 131 | 132/Argenta | 133 | 147/Spazio | 2B | 24 HP | 242 | 500 | 502 HP | 503 HP | 508 | 508C | 509 | 510S | 514 | 518 | 519 | 520 | 524 | 574 Corsa | 60 HP | 600 | 750 | 850 | 1100 | 1200 | 1400 | 1300/1500 | 1800/2100/2300 | 2800 | Albea | Balilla | Bianchina | Bravo/Brava | Campagnola | Cinquecento | Croma | Coupé | Dino | Duna/Prêmio | Elba | Mod 5 | Oggi | Panorama | Panda | Regata | Ritmo/Strada | Siena | Tempra | Tipo | Topolino | Turbina | Uno | X1/9 | Zero
Fiat Group brands Abarth | Alfa Romeo | Autobianchi | Ferrari | Fiat | Lancia | Innocenti | Maserati
Fiat Group Corporate Website | Fiat Auto Website


Fiat car timeline, European market, 1899s-1949s Next ->
Type 1890s 1900s 1910s 1920s 1930s 1940s
89 0123456789 0123456789 0123456789 0123456789 0123456789
City car 3,5 HP 500 A / B (Topolino) ...
Small family car 6 HP / 10 HP 509 / 509 S 508 (Ballila) Ballila 1100 A / B ...
Family car 1 1A / Zero 70 501 / 501 S / 502 / 503 514 / 514 1500
Large family car Brevetti 2 2B 505 507 518
12 HP / 16-20 HP / 16-24 HP Brevetti 15-15 HP 520 / 521 522 / 524 527 2800
Executive car 20-30 HP 3 3A / 3Ter 510 512 525 / 525 S
24-32 HP / 60 HP 28-40 HP / 30-45 HP / 50 HP 4 / 5 / 6 520 "Superfiat" 519 / 519 S


Fiat car timeline, European market, 1920s-1960s Next ->
Type 1920s 1930s 1940s 1950s 1960s
0123456789 0123456789 0123456789 0123456789 0123456789
City car Fiat 500
500 Topolino 600
509 508 Balilla 1100 Balilla 850
Small family car 1100 124
501/502 503 514 515 1500 1400 1300/1500 125
518 Ardita 1900
Large family car 505 507 520 521 522 527 1800/2100
510 512 525 524 2800 2300 130
519
Luxury car 520
Sports car 8V Trasformabile Dino
MPV 600 Multipla 850 Familiale
SUV Campagnola


<- Previous Fiat car timeline, European market, 1960s-1980s Next ->
Type 1960s 1970s 1980s
0123456789 0123456789 0123456789
City car 500 126
600 Panda
Supermini 850 127 Uno
Small family car 1100 128 Ritmo Tipo
Large family car 1300/1500 124 131 Regata
1500 125 132 Argenta Croma I
Executive car 2300 130
Coupé / Roadster Dino
124 Coupé
Sports car X1/9
Panel van Fiorino I Fiorino II
Compact MPV 600 Multipla
Van 600 T 850 T 900 T
1100 BLR / ELR / I / T 238
241 242
Ducato I
Off-road Campagnola (1101) Campagnola (1107)


<- Older Models Fiat car timeline, European market, 1980s-present -
Type 1980s 1990s 2000s
0123456789 0123456789 0123456789
City car 126 Cinquecento Seicento 500
Panda Nuova Panda
Supermini 127 Uno Punto I Punto II Grande Punto
Small family car Ritmo Tipo Bravo / Brava Stilo Nuova Bravo
Regata Tempra Marea Linea
Large family car Argenta Croma I Croma II
Coupé X1/9 Coupé
Roadster Barchetta Barchetta
Panel van Fiorino I Fiorino II Doblò
Mini SUV Sedici
Mini MPV Idea
Compact MPV Multipla
Large MPV Ulysse I Ulysse II

European Car of the Year Awards

Fiat cars have won the European Car of the Year Award 8 times

Concept Cars and Designs

Concept Cars by Italdesign

Designs by Pininfarina


See also

Internal Links

Fiat Value in Italy (Euro)

External links



Car Information and Photos by Marque
Abarth | Alfa Romeo | Amilcar | Ansaldo | Aquila | ASA | ATS | Autobianchi | Bandini | Bertone | Bizzarrini | Branca | Brixia-Zust | Bugatti | Castagna | Chiribiri | Cisitalia | Cizeta | CMN | Colani | Colli | De Sanctis | De Tomaso | De Vecchi | Diatto | Ermini | FATA | Ferrari | Fiat | Fioravanti | Fissore | FLAG | FOD | Foglietti | Fornasari | Frua | Garage Italia | Ghia | Giannini | Giaur  | Innocenti | Intermeccanica | ISO | Isotta-Fraschini | Itala | Italdesign Giugiaro | Laforza | LAM | Lamborghini | Lancia | LMX | Lombardi | Maserati | Moretti | Nardi | Nazzaro | Officine Meccaniche | Osca | Osella | OSI | Pagani | Pininfarina | Project 1221 | Qvale | Savio | SCAT | Scioneri | Serenissima | Siata | SPA | Stanga | Stanguellini | Stebro | Taraschi | Temperino | Urania | Vignale | Viotti | Volpini | Zagato 


Motorcycle Information and Photos by Marque
Aprilia | Benelli | Bimota | Cagiva | Ducati | Ghezzi & Brian | Gilera | Italjet | Laverda | Magni | Malaguti |

Mondial | Morbidelli | Moto Guzzi | Moto Morini | Moto Rumi | MV Agusta | Parilla | Piaggio | Vespa