Automotive News Europe - September 2011 - 64

AUTOMOTIVE NEWS EUROPE

OEM

RESCUING FIAT
Marchionne counts on Coda, Francois to fix flagging European operations
LUCA CIFERRI

lciferri@crain.com

Fiat S.p.A. CEO Sergio Marchionne hopes a mix of Italian experience and French creativity will reverse the automaker’s steep financial and unit-sales losses in Europe. On Sept. 1, Fiat veteran and Italy native Gianni Coda took charge of the European region for the Fiat-Chrysler alliance and Olivier Francois, a Frenchman, moved from his job as Lancia-Chrysler CEO to lead the Fiat brand, which accounts for three-quarters of the Italian automaker global sales. Both executives declined to comment for this story. With 1.67 million new-car registrations in 1991, Fiat was Europe’s second-largest automaker, trailing only Volkswagen AG’s 2.2 million sales. Fiat now ranks sixth in Europe and could drop to seventh because of the sales slump. Marchionne recently admitted that Fiat has suffered in Europe because so much of his management time in the last 30 months has been dedicated to getting Chrysler Group back on track following its 2009 U.S. bankruptcy. Commenting in a statement on the new roles for Coda, Francois and 20 other executives within Fiat’s Group Executive Council, Marchionne said: “We recognize in these leaders the future of Fiat-Chrysler as an efficient, multi-national competitor in a global automotive marketplace.” Also taking a key new job as part of the shake-up is Saad Chehab, who succeeds Francois as Lancia-Chrysler CEO. Chehad, 44, was previously Chrysler’s head of group advertising. Product drought Coda, who joined Fiat 32 years ago, inherits a lot of problems, and he does not have much time to solve them: at 63, he has less than two years before he reaches Italy’s mandatory retirement age. Marchionne’s decision to freeze investments in new product in the second half of 2008 kept Fiat in the black during the economic crisis, but the automaker has lost sales and market share in Europe because of its lack of fresh models. The product drought will continue until 2012. With a weak lineup, Coda will have a tough time stemming Fiat’s financial losses in Europe because the brand will need to offer big discounts to maintain sales. An added challenge is that overall European car sales are set to decline as countries with high public debt introduce austerity measures that will hit consumer spending. Fiat doesn’t break down results by region,

Fiat brand hopes to get a sales boost in Europe from creative ads like the 2007 campaign for Lancia that starred Italian entertainer/model Carla Bruni. The ad was the brainchild of new Fiat brand boss Olivier Francois (inset above).
purchasing for Fiat Auto in July 2006 then promoted him to head of procurement for the entire group in March 2008. His expertise has saved the company billions of euros on purchasing. Marketing success The flamboyant Francois takes over Fiat brand from Andrea Formica, who left the company at the end of August. Formica joined Fiat from Toyota Europe in September 2010. Fiat is hopeful that Francois’ creativity and innovation will complement Coda’s engineering rigor. A Paris-born executive who turned 50 last month, Francois joined Fiat in 2005 after 15 years at Citroen. While waiting for new products, Francois stabilized sales of Lancia’s aging product portfolio with a mix of brilliant ads and special model series. His most famous ad in Europe, shot in 2007, featured Italian model Carla Bruni in the Lancia Musa small minivan. The timing of the ad could not have been better as it began airing right before the world learned that Bruni would marry French President Nikolas Sarkozy and become the country’s first lady. Francois’ first task is to fine tune the marketing that will be used to launch the new Panda, which has been Europe’s best-selling minicar since 2004 and is Fiat’s No. 2 volume model after the Punto subcompact. ■

SERIOUS SLUMP
First-half European sales for Fiat Group’s brands
UNITS % CHANGE

Fiat Alfa Romeo Lancia Ferrari, Maserati Total Group
Source: ACEA

395,924 78,393 52,355 3,556 530,228

-19% +48% –14% –6% –13%

but the company lost about 1 billion euros last year in Europe, according to Max Warburton, a London-based analyst at Sanford C. Bernstein. But Coda, a fast-talkGianni Coda has ing, chain-smoking seasoned executive, has a taken on tough history of leading dratasks at Fiat matic turnarounds. From throughout his 1999 to 2002, he led a career. revival of Fiat’s Latin American unit, which today is a huge profit center for the company. He was called back to Turin in February 2002 to restructure Fiat’s largest business unit, which included Fiat cars, light commercial vehicles and Lancia. His work helped the company avoid collapse. Marchionne put Coda in charge of

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SEPTEMBER 2011

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