EUROPEAN STUDIES
FIAT:
A TROUBLED EUROPEAN CAR GIANT

GROUP 3:

1

Q1: What are the underlying problems facing Fiat’s car division? The performance of Fiat – the Italian vehicle manufacturer – has fluctuated drastically between its founding in 1899 and today. On the one hand, the company has suffered severe failures, flirting with insolvency on multiple occasions. On the other,
On a more positive note, in 2004 Sergio Marchionne was appointed as CEO of the Fiat Group and Corporation, Marchionne started a slow-­‐moving restructure that resulted in significant success as sales increased to 852,000 cars in 2006, revenues increased by 21% to $14.8 billion, and operating profit increased to $184 million.2 In fact, Fiat was pronounced Europe's fastest-­‐growing automaker in 2006. Furthermore, in the first half of 2006 Fiat's vehicle sales shot up by 20.1%3 in a flat European market, helping the Italian auto maker grab back lost European market share which stood at 7.7%4 at the end of 2006 (up from 6.5% in the first half of