ITALY: Fiat head sees auto alliances expanding beyond GM

19 Feb 2004

Source: just-auto.com editorial team

Fiat sees General Motors as a privileged partner, but the Italian car maker also sees itself in alliances with other companies, Fiat chief executive Giuseppe Morchio was quoted as saying in an Italian newspaper.

"We are thinking of a structure of alliances for Fiat that I would define as star-like," Morchio reportedly told Il Secolo XIX.

"GM is a privileged partner, but we also have other collaborations, for example with PSA (Peugeot Citroen), with Audi for Maserati," he said, according to Reuters.

The report noted that GM acquired 20% of Fiat's car arm, Fiat Auto, in a 2000 deal, and the two companies have also developed strong industrial partnerships. But they have recently argued over the validity of a put option, which would allow the Italian company to sell the rest of Fiat Auto to GM from next year.

Asked if the "industrial marriage" of Fiat and GM would work, Morchio reportedly said he did not see the relationship as a marriage.

"Marriage constitutes an exclusive relationship, while in the auto industry you need to have an open attitude to diverse operations," he told the newspaper.

Reuters said that, under its new chief executive, Herbert Demel, Fiat Auto is undergoing a restructuring to improve its competitiveness after a drop in sales led to a crisis two years ago.

At a management meeting at the carmaker's headquarters in Turin on Tuesday, Demel unveiled a plan that includes the creation of a division to oversee a commercial network and long-term strategy for Europe, the report said.

Morchio told Il Secolo that he was sticking to a net profit target at group level in 2005 and at the auto unit in 2006.

"We believe that we can reach this line even in light of the results of the last 12 months, which will again show a loss but give a sense of improvement," he reportedly said.

Car registrations were seen rising by 1% in Europe in 2004 but dropping by 1% in Italy, but Fiat expected to be able to increase its revenues with the sale of new models such as the Panda, he said.

Morchio said Fiat's productivity drive had already saved it one billion euros in one year, Reuters noted.

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