By on May 7, 2015

Fiat 500 "Topolino"

As FCA holds their first annual general shareholders meeting in Amsterdam (after 114 such meetings in Turin), Pirelli has been sold to the Chinese. Pininfarina negotiates its sale to Mahindra. The Italian automotive industry as a whole is in a sad state. The reasons for this are many, but the process of “de-Italianization” of the country’s auto industry continues. In the end, all there could be left is a memory and many homeless ghosts.

Italy gave birth to names recognized worldwide in the automotive industry for their design and sophistication, engineering and fury. It also gave rise to many a brand focused on the simpler side, using a more utilitarian design that nonetheless spawned classics dear to any automotive enthusiast. As to the former, any car lover recognizes names like Ferrari, Lamborghini, Maserati, Ducati; while examples of the former also abound, Vespa, Iso, Innocenti and of course Fiat.

1899 FIAT 4 HP

It didn’t start out this way. Società Anonima Fabbrica Italiana Automobili Torino – or F.I.A.T. for short – was founded in 1899 by a group of noble landholders. These people were witness to the growing industrialization in their country and used their resources to slowly control and direct the process. From among these men, Giovanni Agnelli surged as the leader and soon started buying and crowding his partners out. In due course, his family controlled Fiat and do so to this day.

Initially involved in motor racing, Fiat was one of the leaders in the auto world, producing cars for the wealthy. Fiat was the spearhead into the world for the Italian automotive industry and soon set up shop in other countries, licensing their products to be made by local partners (such as in Germany) and even crossed the Atlantic Ocean in 1908 building a factory of their own in New York. Some even say Henry Ford got some of his inspiration for the assembly line watching the processes carried out by Fiat.

FS Class E626 locomotive

As time progressed, Fiat expanded and starting building locomotives, marine and airplane engines. In World War I, Fiat was a major supplier for the Allied forces. The War followed by the New York stock market crash impoverished Italy and the Italian industry changed its focus. The first Fiat 500 – better known as Topolino due to it looking like Mickey Mouse – came out. Designed by Dante Giacosa, it was one of the first people’s car and started to motorize Italy and other countries in Europe.

With the ascension of Benito Mussolini, Fiat was forced to recede back into Italy. It was rewarded by being given large government contracts and produced everything from planes to machine guns for the fascist hordes. Then Europe’s largest maker, it basically stopped production outside of Italy, though Fiat products were still built under license in other European countries.

Fiat’s success led to the development of other Italian brands. Vicenzo Lancia and Enzo Ferrari were Fiat race car drivers who of course went on to establish their own companies. Lancia in particular was very innovative building the first monococque car (the Lambda) among scores of other innovations. Those companies then spawned others. Everyone knows the story of Lamborghini. Ferruccio Lamborghini was a successful tractor maker. He bought a Ferrari and was so unsatisfied with the car (he thought its controls too heavy and a chore to drive) he went to complain to Enzo Ferrari. Enzo told him that if he, Ferruccio, thought he could build a better car, he should. And thus Lamborghini was born.

Alfa SZ AutoItalia Brooklands

Fiat’s success also birthed Alfa Romeo in a roundabout way. Jealous of Turin’s success, Italy’s most industrialized city Milan gave rise to that famous marque. It soon went on its way and became successful, establishing itself in racing (Juan Manuel Fangio started in Formula 1 with Alfa Romeo, with whom he won his first titles, then went on to Maserati, Ferrari and Mercedes Benz, winning championships with all) and gracing the garages of people of means. It also worked closely with the famous carrozzieri that were the origins of the famous Italian design houses. Zagato was a preferred partner. Many Alfa Romeo cars carry a Zagato body. So do Lancias and even Fiats. They also sit under other famous names like Bertone, Alemano, Fissore, among others. This is one of the reasons sales of those Italian cars seem unimpressive today. Besides the lower market volumes of the times, Italian cars splinter off into thousands of variations, all wearing carrozzieri’s names and not necessarily that of the makes.

Of course, to supply this budding industry, many suppliers were born. Magnetti Marelli, Comau, Pirelli, Brembo and many countless other recognizable names exist. Like most of the other Italian car makers, many of these suppliers would be incorporated into Fiat in a long drawn out process starting after World War II.

As I mentioned in the beginning of this article, Pirelli was sold off to the Chinese. That was a shock to many in Italy. Pirelli was an early partner of Ferrari and their stories are intimately linked. 7 billion euros (not to mention the 1 billion euro debt) overcame any inhibitions however.

Pininfarina Nuova Stratos

Other emerging nations are also looking to buy into Italian know-how. Mahindra is negotiating to buy Pininfarina (also closely associated to Ferrari and Fiat). Year after year of losses, debt (160 million euros) is high and the Indians could possibly soon see better looking cars on their streets. Pininfarina would have a lot of work as Mahindras are not exactly known for their stunning design.

It’s not just emerging market companies taking away Italy’s industry piece by piece. Local European vultures, or rather, partners, are also eating up the Italian industry slowly. Volkswagen has been a major profiteer or investor, depending on your point of view. It now owns Italdesign, former company of Giorgetto Giugiaro. Audi has raided Lamborghini and Ducati. Mercedes Benz has a large stake in MV Augusta. Even PSA has carved out a chunk of Bimota. In the case of the motorcycles, it’s been said the Germans are mostly interested in the light welding techniques the Italian companies use for engines and transmissions.

American companies have also taken chunks out of Italy. In 1970, Ford bought the Ghia design house, famous for VW’s Karmann Ghia, the Volvo P1800, quite a few Chryslers, and countless Fiats, Alfas and Lancias. Sadly, at Ford, Carrozzeria Ghia became a trim line and has since been forgotten in the group, being replaced with the rather more pedestrian sounding Titanium.

Ford-vs-Ferrari-Redux-placement

Ford’s interest in Italy is historic. In the mid part of the last century the Americans had a showdown with Ferrari. Interested in buying Ferrari, Enzo and Henry Ford II played power games which led to entertaining one upmanship like the famous Ford GT40 LeMan victories. On the business side, the potential loss of Ferrari led the Italian government to softly nudge it into the all-encompassing embrace of Fiat. The Italian government’s goal at the time was to strengthen the country’s auto industry.

The current piecemeal parting of Italy’s home auto industry is partly the result of recent governments’ lack of interest. At least Luca Ciferri over at Automotive News Europe thinks so. He cites the bailout of General Motors and Chrysler as examples of a government protecting its industry. He also mentions France’s recently increased 14% stake in PSA to help it ride out the current crisis. Germany fights tooth and nail whenever the EU makes moves that the Germans perceive as threatening to their makes. The British have set up a highly successful action plan, government backed, that has the UK again as one of the largest European car producers.

Meanwhile Ciferri asks, what has the Italian government done? In 2007, they had a sort of clash for clunkers scheme. Due to that program the Italian market peaked at 2.5 million units and has since been halved.

Government action or inaction isn’t the only culprit. Bertone, the reputed carrozziere and design house of Marcello Gandini fame – Miura and Countach, among many others – went bankrupt without even being taken over. Fiat’s ongoing challenging market perception and Magnetti Marelli electronics’ reputation have also been a problem. However, larger trends and currents are at play. Surely part of the problem for the Italian automotive industry is Italy’s economy itself. Recently one the “I’s” in the infamous PIIGS club, many analysts claim Italy’s economy is much larger than officially measured as a heavy government hand drives many businesses into the informal market. The adoption of the euro has not done Italy many favors. In the past, the country could hide inefficiencies behind successive lira devaluations. This is not possible any more. At the turn of the century, Italy was the fourth largest car market in the world. Today it is not even in the Top 10.

As the annual general meeting unfolds in Amsterdam and FCA CEO Sergio Marchionne again beats on his consolidation drum aiming to strike that one last deal, the halls in Turin will be dark. Ghosts of the past walk those halls reminding us of a certain flair, a peculiar lifestyle, a particular way of doing things. Around the world, other people will be using the names of the brands that promised and offered this Italian style to consumers. Ideas will be discussed in other languages, not the original. Documents will be drawn up and plans presented in foreign tongues. If those companies keep the promise of the dolce far niente lifestyle the creators of those marques created, it could strengthen that ideal. However, much is always lost in any translation. A Lamborghini dreamed in German is not the same as one imagined in Italian.

A part of the variation in the auto world is being lost. A peculiar taste and flavor will be lost. And we will all be the poorer for it.

[Image credits: Przemysław Jahr via Wikimedia Commons, Icarus83 via Wikimedia Commons, Tony Harrison (Flickr: AutoItalia Brooklands May 2012 THP_7123) [CC BY-SA 2.0], via Wikimedia Commons]

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94 Comments on “The End of Italy...”


  • avatar
    CJinSD

    Italy has been dead since labor made itself heard during the ‘Hot Autumn’ 45 years ago, ending its post-ww2 economic boom once and for all. Italians don’t even reproduce at replacement rate, a sure sign of a dying culture, and especially one where large families were the culture.

    • 0 avatar

      I hardly doubt it was or has been just labor’s fault. The Italian elite is ine of the most invested in the current business ethos. Don’t think they’ve suffered much.

      • 0 avatar
        Pch101

        The tire industry has been consolidating for decades. The Pirelli shareholders got an offer, and they took it. The US has only two tire makers left, and would have only one had the Cooper Tire sale not imploded two years ago.

        Globalization is squeezing out small producers in the auto industry, and Pininfarina suffered a double whammy of the global financial crisis and deaths of its leadership. It probably makes no difference where it is located.

        FCA is another matter. The Netherlands thing is largely a formality, but it would appear that Marchionne is attempting to create leverage that he can use against both the Italian government and the labor unions that have long looked to Fiat SpA to provide them with jobs, even when there weren’t profits to support them. Marchionne is not so sentimental, and wants to size and locate his workforce based upon consumer demand.

    • 0 avatar
      RideHeight

      “Italians don’t even reproduce at replacement rate, a sure sign of a dying culture”

      Pfft… Not to worry! Boat-a people will-a save-a the day!

  • avatar
    skor

    It’s not just the Italian auto industry that’s leaving Italy. Campagnolo, the famous maker of bicycle components used by just about every Tour de France winner now makes the bulk of its stuff in Romania. Likewise lots of ‘Italian’ clothing is now sewn together in Eastern Europe and Asia.

    • 0 avatar

      I wonder how much of Shimano’s stuff is still made in Japan.

      I ride with Campy equipment and like the company but it’s a bit of an exaggeration to say that “just about every TdF winner” has used their gear. Wikipedia says that less than half have used Campy components since 1948, 31. In the past 30 years, 16 Tour winners have ridden on Campagnolo equipped bikes.

      Speaking of Campagnolo, do you know where I can get a 700c rear wheel with a Campy 8-speed hub without having to pay NOS prices on eBay?

      • 0 avatar
        Syke

        Welcome to Shimano superiority – interchangeability. Of course, the Italians know better.

      • 0 avatar
        Big Al from Oz

        @Ronnie,
        I’m a Shimano fan, but not in cycles.

        Fishing.

        Shimano’s best is made in Japan and Singapore.

        Malaysian gear ranks second in my mind, then the Chinese stuff.

        I must say the Chinese stuff is getting much better.

      • 0 avatar
        mcs

        Maybe it’s time for a SRAM 1x upgrade. Perfect match for your LiteSpeed. I’m thinking about going that route myself. Time to simplify.

        http://www.roadbikereview.com/reviews/industry-looks-primed-to-embrace-sram-1x-for-road

        • 0 avatar
          CJinSD

          The comments to that article are all vehemently anti-SRAM. Odd. Of the bikes I’ve ridden over the past decade, the few SRAM components are the only things I haven’t either had trouble with or replaced at least once. Unfortunately, all I’ve had are their shifters and rear derailleurs.

      • 0 avatar
        chuckrs

        How about a 40 spoke Campy 6 speed hub built with a tubular rim? I might even have a spare rim. Stays true pretty long. Off a 1973 Bianchi I can no longer ride. And rarer than a brown manual diesel station wagon.

    • 0 avatar
      Syke

      Campagnolo was an utter disappointment when I virtually sold my girlfriend on the street to buy a Gitane with all Nuevo Record, instead of making the intelligent decision to go with the all-French model. And its gear has always been a disappointment compared to Shimano, the late Sun Tour, and SRAM . . . not to mention the long-lost Simplex and Huret.

      They’re snob components, you pay extra to ride with your nose slightly in the air, secure in the knowledge that nothing of that brand’s name will ever be seen on a WalMart or Target bicycle. As to whether it performs better, is open to discussion. At least, in the last ten to fifteen years, they’ve gotten they’re stuff good enough that they perform as well as Shimano.

      And, as to Tour de France wins? That’s been Shimano and SRAM for the past couple of decades. I don’t think Campagnolo has put two wins back to back since the days of Merckx and Antequil.

  • avatar
    redliner

    What has not been sampled cannot be missed. Accessible Italian cars are and have been almost completely MIA in the USA. If the current fiat lineup in the USA disappeared overnight, no one would shed a tear. There is nothing inherently Italian about them, save for the retro styling.

  • avatar
    Arthur Dailey

    It’s called ‘globalization’.

    It would be interesting to know the nation of manufacture by percentage for the remaining D2. I am sure that someone has done it and can link us to these statistics.

    For example how many GM products are made in the USA, Canada, Mexico, Brazil, Korea and each European nation? Break it down by country.

    The same with Ford.

    The results might be quite interesting.

  • avatar
    ccode81

    Thanks for mentioning Zagato and posting pic of S.Z, from proud owner of R.Z !

  • avatar
    Zackman

    “In the end, all there could be left is a memory and many homeless ghosts.”

    The way things have been with Italian cars, especially Fiat cars over the last 45 years, would anyone miss it, besides the workers? I certainly won’t, although I loved the 124 Spider! That’s not meant to be a mean-spirited comment, just my personal feeling fueled by the current Fiat 500 and its tin-plate appearance & feel, though I haven’t driven one.

    • 0 avatar
      Roberto Esponja

      Not tin-plate at all. Rap a 500 with your knuckles next time you walk by one, you’ll be surprised. Nice drivers, too…

    • 0 avatar
      bfisch81

      I own a 2012 FIAT 500 – daily drive it. It’s about as Italian as you can get today. The 2015’s have been Americanized with better gauges and a more robust uConnect system to replace the aging Blue&Me.

      There’s plenty of Italian illogic in the design, from the concentric tach and speedo rings to the odd placement of buttons, typically Italian driving position so on.

      It’s no tin plate car. Drive one and you will see that the illusion of speed is as much fun as the real thing. Also wait and see the new 124 that is on its way!

      • 0 avatar
        Zackman

        Interesting takes from you and Roberto. I take back what I said about the 500 until I drive one.

        It’s the front end and the pasted-on appearance of the trim that makes me think “tin-plate”. I guess if it had a real grille, I’d think differently. So goes what one is used to.

    • 0 avatar
      bfisch81

      Personally I wish I could drive the 2 cylinder TwinAir version they have over in Europe. If for nothing other than sheer European weirdness.

    • 0 avatar
      northeaster

      It’s a real Fiat in at least one other major sense. Per Consumer Reports, the 500L has the worst reliability record of any car in the United States.

      I learned so much from both my 1975 Fiat 128 and my early 2000’s Passat, cars that for their times and classes were both simply a pleasure to drive. Repairing them, not so much.

  • avatar
    AH-1WSuperCobra

    A bigger problem for Italy is they aren’t producing new Italians. Their birth rate is sub 1.5 while to maintain a population is something like 2.1

    • 0 avatar
      sproc

      The US is down to 1.87 and has been in continual decline. So not as bad, but not good.

      • 0 avatar
        dtremit

        Well, there’s two options for replacing your population: produce or import. Neither the US nor Italy is particularly good at the former these days — but the US does a lot better at the latter. The US population is about 13% foreign born, versus 8% for Italy. And the Italy number is much lower if you exclude people from elsewhere in Europe — many of the immigrants are from places like Romania, Albania, and Poland that have birth rates no higher than Italy.

    • 0 avatar
      sportyaccordy

      This is a problem across much of the developed world. Pretty much the whole Eurozone is well under 2, along with China, Japan and both North AND South Korea. Basically once kids go from being a necessity to a hindrance to survival, or a country’s culture moves away from the religious impetus to reproduce, people scale back. My wife and I don’t plan on having more than 2 kids, and we just hit our 30s so we might only get one. It’s development’s fault.

  • avatar
    val.catiniit

    Hey no, what do you mean with that title? What happens in my Italy? :(

    Show Auto Reviews

  • avatar
    brianyates

    The 2cv in the first picture looks like it’s seen better days but I’ll bet it still works.

  • avatar
    schmitt trigger

    following the British Auto Industry’s footsteps.

    • 0 avatar
      Pch101

      The British auto industry has made a comeback, now that it isn’t run by the Brits.

      • 0 avatar

        AH, but how British is it? That’s also a question the article raises.

        • 0 avatar
          Pch101

          I don’t think that it matters. If the management is competent and the profits aren’t being diverted to fund terrorist training camps or Chinese armaments, then it makes no difference what passports are involved.

          • 0 avatar
            Joss

            Fundings now diverted to American gun shop stock help Americans deplete Americans.

          • 0 avatar

            I think it does. Whenever there is a Volvo article, cue Chinese detractors, whenever there is a Jaguar one, the same. Plus, British cars were very insular. I think the Mini would have been the last British car that sold in any number outside the UK. Italian cars still sell outside of Italy and even in the US the exotics kept the flair alive. It is a difficult question and one I think the market is working out now.

          • 0 avatar
            Pch101

            I specifically singled out the Chinese for a reason. Well, two reasons: (a) Politically, they pose an enormous threat and (b) As business people, they still suck at quality. (They’ll get it eventually, but they aren’t there yet.)

            In contrast, the Brits are better off with foreigners running their auto business.

            The Italian auto industry is still being run by Italians, there just won’t be as many Italians working in it as there used to be. Expecting FCA to hire more people than it needs is not realistic.

          • 0 avatar

            Major difference there, No one expects them to hire more than necessary (and once hired never to be fired – bigger difference if you will allow me). They are getting there, slowly, unwillingly, but I still have hope.

          • 0 avatar
            Pch101

            “No one expects them to hire more than necessary”

            No, the Italians see Fiat as serving as a sort of guaranteed jobs program. Marchionne clearly wants to change that.

          • 0 avatar

            My point is he has (not him, but reaching back till the previous CEo at least). We will agree to disagree.

      • 0 avatar
        Toad

        Marcelo seems to be pining for a government intervention to prop up the remains of the Italian auto industry, perhaps a modern version of British Leyland. The problem is that any Italian automaker(s) in 2015 have to compete with global manufacturers on a global scale. That has proven to be impossible.

        Quirky national auto brands have disappeared and will stay gone unless they are imposed on consumers via trade restrictions. Modern consumers have come to expect a blend of quality, style, and affordability that the Italians just don’t seem to be able to produce at a sales volume that will keep a business afloat.

        • 0 avatar
          Pch101

          The Italians are doing a pretty decent job of selling Jeeps and full-size pickups to Americans.

          • 0 avatar
            Toad

            I would argue that Americans are selling Jeeps and full size pickups to other Americans; Chrysler/Jeep is basically run and staffed by Americans except for the Canadian CEO who also happens to run Fiat.

            Right now the American half of the equation is propping up the Italian half; the Italian portion is shrinking while the American portion is growing.

            FCA has a brilliant executive who has created a lot of value from previously crippled Fiat and Chrysler, much as Carlos Ghosn has done with Reanult and Nissan. As currently constructed Chryslyer/Jeep is no more Italian than Kia.

          • 0 avatar
            Pch101

            That was the point that I was implying. FCA is an Italian-Dutch company that provides plenty of American employment and feeds a lot of money back into the American economy. Why should we be upset about that?* (*Yeah, I’m looking at you, Peter DeLorenzo.)

            Same with the Brits. Without foreigners running the show, they wouldn’t have an auto industry. They’re better off because of the foreign management and capital.

        • 0 avatar

          Not really Toad (defending government intervention). But it does go a long way. See the French. The current difficulties in Southern Europe will hopefully find a solution one day, and then Italy will have no car industry. That does not exempt the Italians from lousy business administration.

          EDIT: What I’m saying is that some government activism, coupled with a business elite with some “national vision” would help that industry. Especially in the scope of an EU where France and Germany do just that.

          • 0 avatar
            Pch101

            Unless the Italian government has a brilliant plan to make Italian cars more desirable for export, it has nothing of value to offer.

            The story of today’s auto market is that the Japanese and Germans took over as the world’s automotive tastemakers. Detroit never built its business on exports and therefore remained fragmented (its strategy has been to build locally), while the Brits, French and Italians never got the hang of building sustainable export markets that were large enough for them to win. By failing to become truly global, the Italians were bound to lose ground.

          • 0 avatar

            No brilliant plan, I’m just asking it to hold it over as it were. The cars are brilliant enough in ad of themselves (yes, I know the market doesn’t get it, bu the market is a fickle thing). Ford remains a player because the cars are brilliant. GM because it is too big and hits the middle ground for many (and doesn’t have as bad an image outside the US and maybe Europe – it always played the card big and dumb).
            Local manufacturing, development and design – I believe – still has a long road ahead at the base of most markets.

          • 0 avatar
            Toad

            What is the point of being an automaker if people do not buy your cars in sufficient volume to stay in business? Are Italian car makers really jobs program, a national vanity exercise, or a stubborn refusal to accept 21st century realities?

            This sounds like the debate that Great Britain had in the 1970’s; repeating the same mistakes just postpones the inevitable, wasting money and time in the process.

          • 0 avatar
            Arthur Dailey

            @pch Your posting is true with one glaring exception.

            Between 1946 and the early 1960’s the UK was the world’s largest exporter of automobiles.

            Their former colonies/Commonwealth nations, parts of western Europe (still rebuilding from the war) and the USA all purchased British autos in significant numbers.

            Eventually in the 60’s VW “ate their lunch” becoming a major force worldwide.

            Then in the 70’s the Japanese arrived in force.

            I still find it fascinating that Japan is able to support so many native automakers, Toyota, Honda, Nissan, Mazda, Suzuki, Subaru, Mitsubishi, Isuzu and ‘captives’ such as Daihatsu.

            Some of these have proven that an organization can exist as a profitable auto manufacturer with zero or only a negligible presence in North America.

          • 0 avatar
            Pch101

            “Between 1946 and the early 1960’s the UK was the world’s largest exporter of automobiles.”

            It didn’t take them long to ultimately fail in their export endeavors, which was the point that I was making. They tried, but they failed.

  • avatar
    schmitt trigger

    “…..many analysts claim Italy’s economy is much larger than officially measured…”

    I read somewhere that the Italian government was thinking of including prostitutes and bordellos in their GDP calculation.

    Italy is a big Fellini movie. And I don’t mean it derisively, it is just a complex, colorful, fascinating, sometimes absurd, many times deliciously beautiful country.

    It is not a dull society, by any stretch of the imagination. And their industrial design reflects those traits.

  • avatar
    50merc

    In the US, Fiat has a big problem called Fix It Again Tony.

    For me, though, what makes Italian cars intolerable is the famed “Italian driving position” which is apparently intended for short-legged gorillas.

    • 0 avatar

      They launched a funny ad about that recently, featuring a Honda Civic no less. It will take decades to turn that around, but those who buy them, service them and use (as well as most who write about them) are ahead of the curve and know that is simply not the case.

      As to the driving position, I must be one of them. To me they are the easiest car to find a driving position and some seem like they were built for me.

      I must be a gorilla then.

    • 0 avatar
      mike89

      Regarding the driving position, italians tend to drive holding the lower half of the wheel.

  • avatar
    Big Al from Oz

    Hey Marcelo!
    Another fantastic piece on your part.

    Unfortunately the Italians are not that good at business, not like the UK or US or even Asians.

    The Italians have had many great innovations, ideas and designs. Started businesses to manufacture their ideas, which is great.

    I also think the Italian’s have a very social and liberal outlook overall, but then the “rich” just seem to disconnected with the man on the street. Similar to maybe Brasil, but Italy being located in the EU has had an advantage Brasil hasn’t, that is living in a readily close and affluent neighbourhood.

    Also, the buying out of Italian business is not just contained in Italy, but a global trend. This trend will continue. Italian business is great under the correct management, not Italian management.

    Italy must move into the later half of the twentieth century in some way and the rich must let go or the Italian’s will end up like Greece with the average Italian having a unrealistic view on what they are entitled to in life.

    The Italians’ want it all, but not the effort side of life.

    You might disagree with what I write.

    Italy has massive potential, but the Italian will not let it happen.

    • 0 avatar
      cackalacka

      Love the scorn heaped on the Italian work ethic from Virginians and Austrialians on this thread.

      You need a diamond-tipped saw to cut through that irony.

    • 0 avatar

      Hey Big Al!

      Look, there is a point in what you say, but it not the whole enchilada.

      When surveys are taken into how Italians see themselves, a majority of them seem themselves as Europeans first, Italians second. The further North you go, the reverse is true (Swedes see themselves as Swedes, Germans as Germans etc.).

      In part is has to do with what you said, Italians were innovators (and continue to be, see the examples of the takeover of the motorcycle business for one recent example). See the history of Fiat innovation against VW’s. but then something happens.

      It is not lousy administration per se, it is just different. For instance, Fiat administration and processes is what is transforming Chrysler and not vice-versa, examples of which I have given over and over on various threads throughout the year on TTAC.

      Now, that a Fiat job was akin to a government job until very recently at Fiat is true, and part of the underlying process. And that it makes other European people crazy cannot be denied.

      Partly however it is attitudes and general trends in culture, society and economics that the Italians have been swept by. But again you are right, if the Italians keep no brands of their own their future will be Greece, or Brazil. A nice place to live if you have a job, but a very concentrated one in terms of income. And all the bad that goes with that.

  • avatar
    wmba

    Was mightily impressed with the Alfa Giulietta 1750 45 years ago. Made the British sports cars like MGB and TR4 seem like the crude beasts they were. Fiat 124 Syders exhibited fantastic aluminum engine castings.

    Apart from Ferraris and Lambos, the mass-produced Italian cars gradually just got worse and worse from the early 1970s. Fiat Ritmo, anyone? You know you want one! Of course there have been occasional flashes of inspiration, like the Alfasud, let down like the Citroen GS with below pathetic sheetmetal quality. A two year old one was a grey-haired veteran when I lived in London in the mid ’70s, dying the next year of cancer. The Lancia Beta continued the tradition, and gradually Fiats tended towards bottom of class as investment in new models diminished.

    Sure the Alfa Montreal and its V6 were nice, but not durable. The 164 seemed by far more poorly made than its platform mate the Saab 9000. Etcetera. Italian bikes, nice, my pal loves his crazy Ducati, but I know nothing about them.

    The Italian industry became uncompetitive years ago, and crashed more gently than the Brits. Brazil became home, really for the lame cobbled together parts bin specials that wouldn’t have been saleable in Europe.

    Unfortunately, all good things come to an end, and it’s no wonder Marchionne is wandering around rattling a tin cup looking for brass pennies, as he desperately tries to find some deluded automaker who can stump up the money for future Fiat investments as a partner.

    He may or may not make it. But, that’s the way she goes. The world will not be won by Fiat 500L’s, staggering from one warranty service to another, and exhibiting the opposite of usual Italian flair and styling grace as compensation. Lose, lose.

    Time will tell.

    • 0 avatar

      Tipo, Tempra, Uno, Stilo, Panda, Punto, 500. All modern cars that have had success and increase year by year in reliability. While the world not be won over by 500Ls (of which I am a fan and hardly stagger from one service to another), the 500X is here, the new Punto has been seen in tests. The Fiat going onwards will be very different from that in the (70s-90s) past.

      I do too hope Marchionne fails in his endeavor. That way Fiat will use Chrysler and go from there. Hopefully successful enough to revive Lancia and Alfa and to continue pouring money into Ferrari.

      And then I’ll have an alternative. Or then I’ll just go French, ;)!

      Yes, time will tell.

      As to the Brazilian comment, ah but they work. And have won the market. We are a backwards nation, but somehow still buy them. Somehow they still work (no, not advocating selling an Uno in the US).

    • 0 avatar
      Morea

      ” …the Alfa Montreal and its V6 …”

      The Montreal had a V8.

      Perhaps you were thinking of the “Busso” V6?

  • avatar
    AlfaRomasochist

    A few years back I visited the Alfa Romeo museum, located on the grounds of the former Arese plant where the iconic Alfas of the 50s, 60s, and 70s were built. The factory was gone and all that was left was the museum and some deteriorating office buildings. The factory itself had gone dark years earlier.

    I don’t have a point. It was just sad.

  • avatar
    Volt 230

    Britain and now Italy, can France be far behind? the further erosion of the West, folks!

  • avatar
    Spike_in_Brisbane

    As an Aussie I was reluctant to comment here for fear of being ridiculed but the comments have spurred me on. I used to live 5km from the Volkswagen factory in Clayton. There have been locally built and even designed GM Holdens, Ford Falcons, Nissans, Mitsubishis, Chryslers and Toyotas plus some small custom cars.
    …… And then there were none!!

    There are many factors that will also be in play elsewhere. The over supply of cargo ships making transport cheap. Previously 3rd world governments willing to fund factories. Consolidation of the industry into huge conglomerates who will build anywhere that’s cheap. Safety and efficiency regulations making all cars similar. Automation in factories reducing required skill levels. The takeover of component suppliers by manufacturers. I am sure you can think of more.

    I cannot complain, my last few cars have been one Aussie, two French, three German, and an unrememberable number of Japanese. Oh and one Korean.

    • 0 avatar

      But is that good or bad?

      And with all do respect, Australian cars were always pretty much a part of the whole general auto business. Except maybe for panel vans and the car-based pickups (forget the name, sorry again). An Italian car stood for something.

      • 0 avatar
        Spike_in_Brisbane

        Much like the Brazilian industry. But it did represent thousands of jobs.

        • 0 avatar

          We don’t have our own brands. Our own brands that did exist were moderately successful in their own time, but did not have the scale or money to build our own systems. Australian industry was much better than us at that.

          Similar to you though, we do have our own Brazilian-ish cars, Fiat novo Uno and Palio, VW Gol, Chevy Onyx and all derivatives, Ford Ka and EcoSport. We are putting cars out there and some will get a chance to try them outside our borders. But they follow the company script, so they feel like a car that belongs to that company. So no true Brazilian car ever (unlike you guys).

    • 0 avatar
      jeffzekas

      The biggest problem: the Chinese don’t have to follow pollution standards or labour standards, so they can make stuff cheaper. The next big problem: lack of quality- according to CR, Chinese tires lack longevity and handle poorly. So, instead of getting a “real” Pirelli tire (and all the quality that the name implies) I am getting a crappy Chinese tire with the Pirelli name stamped on the side.

    • 0 avatar
      Pch101

      Australia has always been too small of a market to sustain local production without high barriers to protect it. The isolation doesn’t help, either.

      There are no economies of scale with that low of a population. With the tariff down to 5% and the FTAs with parts of Asia, it’s more efficient for auto producers to just import it. It would have been necessary to create a global reputation on par with the Germans in order to change this, and that wasn’t going to happen.

      • 0 avatar

        Whereas Brazil does an will. Take note big makers, we need your foreign wares and will and do pay a premium for them. But if you develop locally (not old, develop) you will reap the rewards.

        • 0 avatar
          Pch101

          The large markets can afford play by different rules. Plenty of OEMs can and will set up shop in Brazil because there are a lot of potential customers; the trade restrictions encourage them to locate production domestically.

          But the market isn’t large enough for this to occur without the consumer paying higher prices, so this literally comes at a cost.

          • 0 avatar

            Yep. No argument there, and the key phrasing in your response is “trade restrictions…locate production domestically”. This is the heart of current and historic positioning. Is it enough? For now I think it is.
            That is what we trade off on.

  • avatar
    Big Al from Oz

    http://www.bloomberg.com/news/features/2015-05-05/how-3-d-printing-is-saving-the-italian-artisan

  • avatar
    hawox

    italy gave endless amount of money to fiat during years.

    alfa was given even if there were other companies interested, also lancia was payed next to nothing.
    the factories were financed by italian gov.
    many state aids were given even if theoretically forbidden, or the useless clash for clunkers of the last 20 years….

    not to mention a total protection from concorrence, when hyundai started to look were to set they european quarters quite litterally ran away from italy.
    in the past fiat market share in fleets was near to 100%.

    and many other favorable decisions like the renunciation to invest in computer and electronics (were olivetti was among the pioneers), or the neglect to the railway system…

    reality is that fiat was at a dead end, then americans gave out chrysler for free allowing to keep the show on some more years.

    • 0 avatar

      Olivetti, just like Pirelli in telecommunications. Both wound up dead, or rather, Pirelli survives.

      Yours is (respesctfully), the alternative view that however, does not build dreams or carry a country foward (in a dollar and cent viewpoint).

      But maybe yes.

      Sorry but can’t help feel this view is penny wise and pound foolish.

  • avatar
    NN

    Well done piece, Marcelo. Yet, as we sit here, today in the USA we have more Italian-made cars to choose from then we have ever had in my lifetime (born 1980, right as Fiat was exiting the market). The Jeep Renegade sales from last month alone probably equal the total amount of Italian cars sold stateside in 2010. Add the Fiat 500x (the only Italian made Fiat) and the Maserati presence which has grown exponentially since the Ghibli arrived, Alfa making a comeback (all Italian-made, thanks to Marchionne, and IMO the right decision), and of course the few Ferrari’s and Lambo’s that have always been here. Despite FCA headquarters being located in Amsterdam, is any real product decision making done there?

    What has happened, and continues to happen, is deep pocketed global organizations understand the value of The Brand, and realize that much of The Brand’s value is derived from the particular character that it’s heritage and origin bestow upon it. The result is not the hollowing out, but rather the re-emergence of vehicles with national character that support their brand’s history, simply financed by foreigners under more sustainable business circumstances. It’s good business, because people will pay much, much more for a “real” Fiat than a similar but “soul-less” Geely. Thus, we have more British models, with more British character, than ever before available to global (not just local) consumers–just financed by the Indians. Same is happening with Italian cars, with financial support coming from wherever Sergio can dig it up. I, for one, look forward to buying a reincarnation of the Alfa 159 should one ever become available in the US.

  • avatar
    GeneralMalaise

    Interesting post, Marcelo. I’ll be FIAT fan for the rest of my years. I’ve owned a lot of cars, both American and foreign, mostly good, some bad. The most enjoyment – by far – has been found in owning and driving my X1/9s and now my Abarth. Just something about them.

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