Trying to summarise Fiat as being a "strange" company is a bit simplistic. You need to know the company's background and recent history to understand some of its decisions.
Fiat was 4th biggest seller in Europe even just a few decades ago, when it used to have getting on 15% of the European market and just under 2 million sales. Half those sales were in Italy.
It's "market" was in small and mid-range (ergo "cheap") cars such as the 127/8, Uno, Panda, Strada.. you name it. It never really did well with bigger cars (130,131,132) .. and in fact it didn't really invest in that sector, since Italy (half its market) wanted small and mid-range cars.
At the end of the Seventies, the Japanese had arrived in force.. followed by Korea, Indonesia and Uzbekistan. These manufacturers brought their own small and mid-range cars which were also "cheap" but crucially had warranties and reliability (relatively). These companies were not "small" start-up producers - the likes of Datsun (Nissan), Mitsubishi, Honda and Hyundai etc. had heavy metal industrial conglomerates behind them. Fiat was just selling a few cars in Italy mostly for low margins. It's now in trouble.
Whilst the German brands (VW, BMW) in particular responded by going more and more "up-market", Fiat couldn't. Half its sales are in Italy. It diversified its range by extensive parts/platform sharing and by developing flexible platforms. Tipo (Mk1) was the first car that could be adapted for different wheel length derivatives on the same production line... and it was a real game changer.
Technically the cars were cheapened by the need to make the margin (Fiat's production was all in Italy.. and if you imagine that's a good landscape to operate a large industrial conglomerate.. look at what happened to the similarly afflicted Renault/Peugeot which nearly went bust and British Leyland which did).
So.. quality declined (relatively), market share declined, profit declined. Uno (1983) kept the company alive through the 1980's. Fiat got into Brazil and still is the market leader there. And Turkey.. making Regattas. Fiat still evolved its platform sharing tech' and expanded it's engine production/technology (FIRE and the FPT factory in Poland). But Brazil and Turkey and selling engines to Vauxhall.. helps the cashflow but does not generate colossal profit.
Meanwhile new models are still chasing the market leaders for quality and technology and positioning.. though arguably the image of Fiat as cheap and cheerful was set in the 1990's.. when Fiat were busy with their production/technology. Alfa had a bit of a resurgence on the back of Tipo (145, 146, 155, GTV, Spider and then 156 and GT.. whilst Fiat got Tempra, Bravo/a and Multipla.. whilst Lancia got Dedra and Delta. All related to Tipo.
That job done, Fiat brought out Punto, which was the only real sales hit.. and again, the cashflow came in handy since Fiat was by now skint again. Other manufacturers merged and got into China. Fiat is now a 1.5M cars a year producer and needs a big tie-up to get volume. It does a reverse-purchase deal with GM and shares some platforms... and also tries ties-up with Peugeot/Citroen (Ulysse). Fiat also (desperately?) look at a Rover tie-up but Rover choose BMW.
Ventures into China and India with whoever doesn't have a European tech' partner prove abortive. The un-partnered local manufacturers are un-partnered for a reason.
After Punto.. we got Stilo and new Bravo. Stilo was a new platform, let down by under-investment in development and ultimately quality. Fiat is skint and needs cars in the showroom more than it needs to match VW Golf quality standards. It's still more reliable though..
Meanwhile Fiat's Polish factory is churning out relatively profitable Cinq's and Sei's even though no other European manufacturer can make more than £100 profit on cars this size. Fiat's deal with GM (GM have to buy Fiat out.. ) falls through. GM doesn't have the cash/doesn't fancy it and has to buy itself out of its contract. Fiat gets enough money to invest in 500.
Meanwhile Alfa wants cash. The GM tie-up produced 159 and Brera but the GM pull-out meant Fiat had to finish these expensive projects alone. Fiat doesn't need this. Fiat has no cash. Still.. they find a way to produce different track and different wheelbase cars on the same production line. Wolfsburg can only dream.
Sergio realizes he needs serious volumes to get out of the cycle of skint followed by a hit model followed by skint... and the best place to find it is with the under-resourced Alfa. He plans to bring out a new 159 and model range.
By now it's 2008.. Fiat has just 1.2M sales from an old model range, although 500 is propping up the balance sheet single-handedly.
Fiat dumps unproductive capacity and looks forward to a new Alfa line-up. Fiat has 500 and GP and Bravo, which is not a bad place to be... but then the recession hits and European sales tank. Sales collapse to 1M and do we need to spend a fortune developing a new model to sell into that rubbish market...?
Stateside, Benz dumps Chrysler and Chrysler goes bankrupt. The US government can "sell it" (i.e. give it away) to anyone who can save it. Anyone who has state of the art platform sharing technology that isn't Japanese. Or German. What about Fiat? Sergio bites Barrack's arm off, to the shoulder.
So.. what does Fiat now need that it doesn't have...? What about cash..?
The Alfa revival gets canned while Fiat becomes FCA. Bravo/Giulietta becomes Dart and Renegade and 200. Chrysler gets some mojo back and begins a 6 year streak.. each month's sales better than the same month in the previous year. FCA now sells 2.5M cars... it has "volume" and cash for the first time in 40 years.
Sergio also has a dealer network to sell Maserati, Fiat and Alfa in the US. US likes "Made in Italy" .. although Sergio realizes he has no Alfa. The Alfa genesis is on again (Giulia this time.. properly invested) with a whole succession plan rather than just one model every 10 years.
Fiat (mostly Euro' sales which are in the doldrums) is making do with revisions of the 500 and some payback from Turkey (Aegea/Tipo).. Tie-ups with Mazda also providing new models with someone else doing most of the work. Fiat is a bit busy at the moment.
Punto? Probably needed next.. but complicated by the loss of the Mito (canned, since all Alfa's will be belatedly upmarket, made in Italy and RWD). The 500..is still doing well and Fiat is dabbling with some niche stuff/variations on platofrms which must mean it has some confidence/money to try out different ideas...
Next big job will be image and marketing. In all the excitement ^^ there hasn't been much. 500 is cute but every other Fiat breaks down a lot, if it hasn't rusted first, eats your children and causes radiation poisoning in arctic foxes. They're not nice like VWs..
Apart from that.. It's all pretty usual car production stuff.
Ralf S.
