FIAT or Fabbrica Italiana Automobili Torino (Italian Automobile Factory of Turin) was founded by Giovanni Agnelli and several investors in 1899. Its acronymous name was changed to upper and lower case Fiat in 1906. Agnelli led the company until his death in 1945, while Vittorio Valletta administered the daily running of the firm.
Its first car was the 3 ½ CV, which strongly resembled the contemporary Benz. In 1903, Fiat produced its first truck and in 1908, manufactured its first aircraft engine. The same year, Fiat started to export cars to the US. Around the same time, Fiat taxis became popular in Europe.
By 1910, Fiat was the largest automotive company in Italy and continues to be so today. That same year, Fiat built a new plant in Poughkeepsie, NY. At that time, Fiat cars were luxury items costing many times more than a Ford Model T. During World War I, Fiat had to devote all of its factories to supplying the Allies with engines, aircraft, trucks, ambulances and even machine guns.
After the war, Fiat introduced its first tractor, the 702 and by the early 1920’s had a market share in Italy of 80%. In 1921, workers seized Fiat’s plants and hoisted the red flag of communism over them. However, the Italian Socialist Party and its ally organisation, the Italian General Confederation of Labour ordered the end of the occupation to appease the centrist parties. In 1923, the year after fascist leader Mussolini came to power, Fiat opened its famous Lingotto car factory, then the largest in Europe and the first Fiat factory to use assembly lines.
By 1925, Fiat controlled 87% of the domestic car market.
During World War II, Fiat made military vehicles for the army (including tanks, and armoured vehicles) and aircraft for the air force, later for the Germans. In 1945, with the overthrow of Mussolini, the National Liberation Committee removed the Agnelli family from leadership roles in Fiat because of its close ties to the fascist regime. This action was not reversed until 1963 when Giovanni’s grandson, Gianni, took over first as general manager until 1966 and then, as chairman until 1996.
Gianni masterminded a massive reorganisation of the company to reverse its highly centralised and outdated management structure, making it extremely inflexible and held back expansion, which became rapid.
In 1967, Fiat made its first acquisition when it purchased Autobianchi, enabling its car production to outstrip Volkswagen with 1.75 million cars produced in 1968 generating sales amounting to $2.1 billion. Then in 1969, it purchased controlling interests in Ferrari and Lancia. At that time, Fiat was a conglomerate owning Alitalia, toll highways, an office machine manufacturer, a paint company, a civil engineering firm and an international construction company.
Expansion of the company continued apace with the opening of a Fiat plant in the new city of Togliattigrad on the Volga in the former Soviet Union in 1970 producing the Fiat 124 as the Lada. Thereafter, Fiat automobile and truck plants were also constructed in other communist countries such as Yugoslavia, Poland, Bulgaria and Romania.
Despite offering a relatively competitive range of cars, Fiat was not immune from the financial effects of the oil crisis in 1973. During this time, Libya acquired a 9.6% stake in the company in exchange for a capital injection of £250 million. In 1979, Fiat became a holding company when it separated various businesses into autonomous companies, including Fiat Auto. A fall in oil prices in 1981 forced Fiat and Lancia to withdraw from the US market. In 1989, it did the same in the Australian market. In 1986, Fiat acquired Alfa Romeo from the Italian government and in 1993, it took over Maserati.
Paulo Fresco became chairman of Fiat in 1998. By this time, Fiat’s market share in Italy had fallen to 41% from around 62% in 1984. His efforts to reverse this trend were frustrated by the unions. In 2003, Fiat shed its insurance interests and its aviation business FiatAvio to Avio Holdings. In February 2004, the company sold its interest in Fiat engineering, as well as its stake in Edison. Sergio Marchionne was appointed CEO of Fiat the same year. The success of the Grand Punto model and the award-winning 500 model saw a turnaround in Fiat’s fortunes placing the company in profit again.
In 2008, Fiat returned to the US and Canadian markets with the new 500. In December 2013, the Grand Punto was discontinued to focus on the Fiat 500 and the Fiat Panda. Then, in 2009, Fiat S.p.A. initially acquired a 20% and then full ownership in the bankrupt Chrysler Company by January 2014, forming the new Fiat Chrysler Automobiles NV, eventually becoming the owner of Fiat Group.
The Fiat Group currently produces vehicles under twelve brands: Abarth, Alfa Romeo, Chrysler, Dodge, Ferrari, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Ram Trucks and SRT.
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