This website uses cookies to ensure you have the best experience. Learn more

Fiat Automobile Corporation Essay

1607 words - 6 pages

In 2002, Fiat recorded one of the biggest annual losses in the history of the Italian corporate world. Its pre-tax loss for the year was a massive €429 million and this heralded the beginning of a tough decade for the auto company. The loss was the conclusion of an ambitious diversification that Fiat had aggressively pursued beginning in the late 90s. The company had been expanding its businesses while at the same time buying other related and even unrelated companies sinking in hundreds of millions of euros in these ventures. Some of the moves did not achieve the success the company had anticipated and the company’s financial condition worsened leading the management to embark on cost cutting measures that included lay-offs (Jennings, 2007).
Lay-offs as a cost cutting measure of course did not go down well with the company’s employees. Labor problems soon emerged between the company’s employees and the management eventually attracting government attention. The government would later intervene and complicate matters even more. The whole crisis brought three major issues to the forefront. These issues include poor management, political intervention, and internal conflicts (Szczesny, 2009). Fiat had for a long time enjoyed success as a respectable automobile company successfully competing against auto giants such as Renault, Mercedes, VW and Toyota. More liberalization within the European automobile industry saw companies such as Toyota and GM aggressively entering the predominantly market and quickly eroding Fiat’s market share.
Faced with competition from companies that had invested billions of euros in advancing their brands in addition to introducing several other models, Fiat put its hopes in a new vehicle model, Stilo. Just like many of the businesses Fiat had heavily invested in its new model, which was meant to help the company reestablish its foothold in the European automobile market but was almost a flop. The new vehicle model did not do as well as the company had projected. As of 1990, Fiat commanded an impressive 14% market share in Europe but as of mid 2002, the company’s share of the market had reduced to just 7.9%.
The hugely disappointing investments that the company had acquired led the company to have huge debts and impede restructuring measures that the company embarked on in 2001. For instance Fiat had intended to cut its debt by half from a high of €6 billion to €3 billion but instead the company’s debt rose by another €600 million to stand at €6.6 billion. The poor financial performance and mounting debts led to the company’s stock loosing value further worsening an already dire situation. Having been a global brand for several years, Fiat found itself sailing in unfamiliar waters. The new models it was introducing into the market were just not resonating with its customers and its brand equity was rapidly fading. The losses the company was making were dragging it down and Fiat was just not able to infuse...

Find Another Essay On Fiat Automobile Corporation

A marketing plan -Shanghai GM Essay

3760 words - 15 pages potential. Some makers such as Volkswagen and Toyota are considering China to be a main production base and key to their global strategy. The Chinese "Big Five" included manufacturers with capacity over 100,000 units. Included are Volkswagen, which is planning to increase capacity to 950,000 units by 2006; GM (Suzuki, Isuzu, and Fiat); DaimlerChrysler (Hyundai, Mitsubishi, China Motor); Toyota (Daihatsu); and PSA. Manufacturers with less capacity

Marketing Plan - Toyota Motors Corporation India

3094 words - 12 pages 1. Executive Summary Toyota Motor Corporation entered India in 1997 in a joint venture with the Kirloskar Group. Toyota Kirloskar Motor Private Limited is a subsidiary of Toyota Motor Corporation of Japan, for the manufacture and sales of Toyota cars in India. The company Toyota Kirloskar Motor Private Limited (TKMPL) according to its mission statement aims to play a major role in the

Suzuki Marketing Report


Strategic Growth Plan for Chery Automotive

3161 words - 13 pages the same time, Japanese and Indian automakers are focusing their designs on stylish and fuel-efficient models (Rowley, 2008). Regardless of the domestic position, no Chinese company enjoys significant power within the international market.Top Ten Automotive Firms in China•Shanghai Automotive Industry Corporation (SAIC)•First Automobile Works (FAW)•Dongfeng Motors•Chang'an Motors•Beijing Automobile Works•Guangzhou


7041 words - 28 pages based Thonburi Company to manufacture pick up trucks.•Posts sales of 454345 vehicles in the year, highest by any automobile company.2007•JV with Fiat to gain access to Fiat's diesel technology and to the latter's strong overseas distribution network for its passenger cars.•Launch of 'Global Truck' and 'Global Pick-up' in domestic and international markets.•Tata Motors bags National Award for Excellence in Cost ManagementBOARD

The History and Benefits of Electric Cars

1527 words - 6 pages experimental car used solar energy to recharge its batteries. More recently, in 1996, General Motors Corporation announced the first modern, mass-produced car designed specifically as an electric car. Also in 1996, the Honda Motor Company introduced another electric car, the first with nickel-metal hydride batteries, for sale in the United States. Italian automaker, Fiat, announced it will begin making vehicles with a new, standard-sized battery based on

Executive Report Ford Motors - Capella University - Assessment

4413 words - 18 pages Executive Report Ford Motor Company Company Background and Organizational Structure The automobile industry is a competitive market providing several options for consumers. With all these automakers, Ford Motors stands to be the oldest car maker in the industry. The Ford Motor Company was officially incorporated in 1903, when Henry Ford launched his company in a converted factory in Detroit (Encyclopedia of Detroit, 2015). Ford

Case study of Automobile Industry. Research on General Motors

5656 words - 23 pages ."GM did a series of positive activities to adapt and hold china car market. In 1997, GM has a fifty-fifty joint venture automobile company, with Shanghai Automotive Industry Corporation (SAIC), built Shanghai GM (SGM)'s plant, which consists of vehicle, engine, and transmission assembly operations, as well as a marketing and administration headquarters. Total investment is about US$1.5 billion. It has an annual capacity through its two shifts a

Feasibility Analysis of Alternative Fuel Vehicles

1815 words - 7 pages With fuel costs rising, alternative fuel vehicles are becoming exceedingly attractive to the consumer. After thorough research, it is our opinion that Lotus Car Rental Corporation should invest in the purchase of a small fleet of Alternative Fuel cars. Lotus Rental Car will reduce expenses, increase customer base, and have greater profits by adding alternative fuel vehicles to their fleet.New legislative policies are being created in the

Automobile Ancillary Industry Analysis

8813 words - 35 pages to Indian auto ancillary manufacturers attaining their current pre-eminent status among global automotive components manufacturers.Evolution of the global automotive components industry and current trendsThe fortunes of the global automotive components industry are inextricably linked to those of the global automobile industry, and quite naturally so. As a detailed discussion of major forces shaping the auto ancillary industry later in this

Organizational Structure and Process Design: A case Study on Maruti Suzuki

8948 words - 36 pages IntroductionMaruti Udyog Limited is a subsidiary of Suzuki Motor Corporation, the largest manufacturer of mini passenger vehicles in Japan in terms of sales volumes. Suzuki was also the eleventh largest vehicle manufacturer in the world and the fourth largest manufacturer in Japan in terms of worldwide sales volumes in 2000. Maruti was ranked twentieth in terms of worldwide sales volumes amongst vehicle manufacturers, and has been the largest

Similar Essays

Sergio Marchionne And The Chrysler Group

703 words - 3 pages Fiat is in Turin, Italy. Fiat has low profit margins, but the combining of the Chrysler and Fiat brands Mr. Machionne may be continually successful at competing with the other automobile manufacturers. In fact with the production of the Jeep Cherokee, a small sport utility vehicle, the combined company was able to show profitability (Clothier, n.d.) After researching the Chrysler Corporation and Fiat's CEO taking the reigns, it appears that it

Chrysler Essay

837 words - 4 pages    The Chrysler corporation was founded by Walter Chrysler in 1925. Chrysler is one of the Big Three American automobile manufactures. The Big Three is when used in relation to the America automotive industry, most generally refers to the three major US automotive companies: General Motors, Chrysler,and Ford. The team are also sometimes used in relation to the Three major automakers of other countries. Chrysler greatly expanded in 1928, when it

Internationalization Of General Motors Essay

5820 words - 23 pages Oldsmobile) in 1897, followed by Cadillac Automobile Company in 1902 and Buick Motor Company in 1903. Under the leadership of William Durant, September 16th 1908 marked the birth of the General Motors Company, initially incorporating the Buick Motor Company. GM then purchased Olds Motor Works in November 1908, a 50% stake in the Oakland Motor Car Co (later Pontiac Motors) in January 1909, and Cadillac in July 1909. During its first few years of

General Motors Financial Ratio Analysis

1283 words - 5 pages General Motors - Financial Ratio Analysis I. General Motors History Highlights In its early years the automobile industry consisted of hundreds of firms, each producing a few models. William Durant, who bought and reorganized a failing Buick Motors in 1904, determined that if several automobile makers would unite, it would increase the protection for the group. He formed the General Motors Company in Flint, Michigan, in 1908