Following the end of Benito Mussolini’s rule in Italy in 1945, the Agnelli family, headed by Fiat founder and chairman Giovanni Agnelli, lost control of the Fiat car company due to its ties to the dictatorship. The family finally regained control of the business in 1963 when Giovanni’s grandson, Gianni Agnelli, took over.
having assumed control, Gianni set out to restructure Fiat’s management, making it much less centralized. The production of cars, trucks, and tractors became effectively independent of each other. The more flexible regime allowed Fiat to plan its expansion and in 1967 it took over the Italian company Autobianchi. The acquisition enabled the company to outsell German competitor Volkswagen, and by 1968 revenues exceeded $2 billion.
The following year, Fiat expanded further, taking a majority stake in Italian rivals Ferrari and Lancia, and looked quite capable of taking the lead over the American powerhouse from Detroit in the race for auto production dominance.
Fiat also continued to diversify its operations by owning the Italian airline Alitalia, major toll roads, as well as office supplies and electrical equipment companies. They also had assets in the Soviet Union, building the AvtoVAZ plant where the Lada, based on the Fiat 124, was built. Elsewhere in Eastern Europe, the company had holdings in Romania, Yugoslavia and Bulgaria.
Importantly, Fiat, with its fuel-efficient cars, was able to take advantage of the 1979 oil crisis, when fuel prices skyrocketed, by getting record sales in the United States. However, as oil prices stabilized and subsequently fell, they lost their share of the US market and in 1984 withdrew from the country.
Back in Europe, however, the Italian giants continued to gobble up their rivals. Alfa Romeo took over in 1986 and in 1993 Maserati. The acquisition of Maserati allowed the Fiat name to re-enter the United States market in 2002, and sales across the Atlantic have been healthy ever since.
The late 1990s saw a shift in the market and the falling value of the company’s shares led to the appointment of General Electric chairman Paolo Fresco as chairman in 1998. However, Fresco’s initiatives were met with opposition. opposition from company unions. Despite opposition, Fresco went ahead and in 2000 entered into a joint venture with US-based General Motors, which saw GM gain a stake in Fiat Auto, the company’s automobile division. However, within five years the partnership was terminated.
More recently, the acquisition of the European division of General Motors, GM Europe, has been considered. However, a major part of GM Europe, Opel/Vauxhall, was later acquired by Magna International.
