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Fiat planning major costs savings
By Stéphane Schlesinger on 28 June 2005 | 
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Fiat Auto CEO Sergio Marchionne wants to accelerate Fiat Auto’s recovery with several cost cuts, rationalizing research and development, spending less on advertising and reducing staffing. He seeks to save €105 million in 2005 and €180 million in 2006 on wages, €150 million on communication and €200 million on R&D. Even if GM gave Fiat €1.55 billion for breaking their alliance, Fiat’s situation is not safe yet. It should soon be better off with such new models as the Punto III, the new Croma or the oncoming SUV, but then, the brand has to face the misfortunes of the Punto II, Idea and Stilo. Marchionne hopes Fiat will break even in 2006.
Fiat chairman Luca Cordero Di Montezemolo announced Fiat’s priority is to find industrial partners to create such alliances as that made with PSA, since 2 of their main markets, Italy and Poland, are not performing well at all. We know that there have been negotiations with SAIC, Suzuki and Tata. Besides, he claimed the rumours of Ferrari being brought to the market were not founded. Fiat’s situation seems to become clearer and clearer, with a stabilized management team and an array of new models, such as the Alfa 159, Fiat Punto III or Lancia Delta III in 2006. Besides, Marchionne confirmed there would a big crossover made by Maserati, a brand he hopes to see sell 10,000 vehicles a year as soon as 2007. Anyway, everything still depends on the success of the new Punto.
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