Fiat Auto Chief Says Carmaker Too Dependent on Italy, Aims to Increase Penetration in Europe

TURIN, Italy July 14, 2004; The AP reported that Fiat SpA is too dependent on Italian consumers and will try for greater market penetration in the rest of Europe as part of its comeback strategy, the head of the company's auto division said Wednesday.

Fiat Auto chief executive Herbert Demel said that over the next two years, the company's strategy will see it "progressively ever more committed to innovation of the product and of quality, to penetration of the European markets, to the progressive growth of income," the Apcom news agency reported.

"Today we are a company which depends still too much on the Italian market," said Demel, a former executive at Volkswagen, Europe's largest carmaker.

For decades, Italian consumers were highly loyal to Fiat, but recent years have seen many of them increasingly buy other European cars as well as Asian brands.

Fiat's new management has been pursuing the Agnelli family's policy of putting efforts into Fiat's auto division. The company has been banking on new models as an important way to turn around the division's fortunes.

"Sure, we would like to see the results of our work immediately, but this doesn't happen in our business," Demel said, speaking at a gathering of automobile manufacturers in Turin, Fiat's home. "Whoever is familiar with the automobile business is aware that is a difficult and rather long road and that it requires vision, plans, continuity and determination."

Earlier this year, Demel said he hoped to halve Fiat Auto's operating loss to about 500 million euros ($620 million) in 2004.