The History of FIAT
Updated September 20, 2015
As most auto enthusiasts know, Fiat isn’t a niche Italian car company anymore. FIAT is now part of FCA, or FIAT Chrysler Automobiles, which is a major car manufacturer under the direction of visionary CEO Sergio Marchionne. And FCA has big plans. With their sights on almost all the major automotive-consuming countries and having brands such as Jeep Chrysler, FIAT and Alfa Romeo, FCA is posed to join the leviathans Toyota Motor Corp., General Motors Co. and Volkswagen Group on the world stage. Of course, it wasn’t always that way. FIAT started with very humble origins well over 100 years ago. Here’s the story:
The name FIAT represents “Fabbrica Italiana Automobili Torino” which translated means Factory Italian Automobile Turin. FIAT was founded by Giovanni Agnelli in 1899 and their first model, the 4HP, appeared the same year. The 4HP was a good car and demand was established quickly. By the late 1900s, FIAT automobiles were well known and production numbers were robust.
In the late 1910s, Giovanni Agnelli, now its managing director, visited Henry Ford’s USA factories in Detroit and was quite impressed his production techniques. Upon returning to Italy, he immediately introduced American-style mass production to FIAT. The result was the building of the huge Lingotto factory outside of Turin, Italy, which was not only the largest factory in Europe at the time but is still remembered for having a massive oval test track on its roof. The Lingotto factory, in all its immensity, immediately became the symbol of the growing Italian automobile industry. Demand grew rapidly, leading to the construction of a second plant in Turin. Before the break out of WWII, FIAT employed 50,000 workers and remained a major driving economic force in Italy. After WWII broke out, however, much of FIAT automobile production was paused and equipment for the war effort was produced.
Giovanni Agnelli controlled the company until his death in 1945. His family held a majority share of the business but no member succeeded his position. In his place long time employee Vittorio Valletta became the chairman. After WWII, consumer auto production quickly resumed and during the magical decade between 1959 and 1969, FIAT’s output rose from 425,000 to 1,751,400 cars per year. Things slowed down a bit in the 1970s when FIAT was hit by strikes and some unsuccessful product designs. The world-wide oil crisis of 1974 should have helped out but by then the company had already expanded its product range to big cars and exotic cars such as FIAT 130 and the Ferrari-engined Dino. Furthermore, its reputation was damaged by the use of inferior quality Russian steel and extensive quality control problems. In fact, in 1983 FIAT had to pull out from the North America due to bad press, poor quality and lagging sales.
However, other Italian car makers were even worse and sensing opportunity FIAT went on a buying spree back home. In 1978 it absorbed Lancia, and in 1986, Alfa Romeo. FIAT also dabbled with Ferrari. Earlier in 1969, FIAT reached an agreement with Enzo Ferrari to take over 50% of its stakes, letting Enzo to concentrate on motor racing without worrying the financial side of the business.
During the 1990s, there were moments of significant up and down and to its new CEO, Sergio Marchionne, it was increasingly obvious that FIAT could not fight against the Japanese and Korean manufacturers by itself. As a result, in 2000, it surprised the entire world by merging with General Motors. This allowed it to share engineering and production costs with Opel and created some joint projects, such as Grande Punto/Opel Corsa, Croma/Opel Vectra and various powertrains. However, in 2005, FIAT and GM separated and in 2009 FIAT began a merger with Chrysler Corporation. That merger is complete today with the combined company referred to as FCA. If you are in the Newport News or Norfolk area, stop by Pomoco Alfa Romeo FIAT of Newport News, VA and get a good look at over 100 years of proud history; the FIAT line of automobiles.
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