Fiat Auto 2003: A new opportunity (Chinese version)

Fiat Auto had been operating at a loss for several years and in 2002 its losses had increased 150%. The crisis began in the years 1990-1999, when the company had focused its efforts on developing traditional products that sold best in Italy and emerging markets. Meanwhile, it had passed up the opportunity to take the lead in new segments such as multi-purpose vehicles (MPVs), sports utility vehicles (SUVs) and "city cars". In 1998 the company announced a development plan that put the emphasis on growth in emerging markets. However, given the trends in the world economy, this internationalization strategy became a burden to the company. As the results did not live up to expectations, in late 2001 the Fiat Group decided to reorganize Fiat Auto into business units. That was when Giancarlo Boschetti was appointed to take over as CEO. Boschetti introduced a new business model and promoted a first package of measures. However, the company's poor performance in the first nine months of 2002 called for a new "Relaunch and Restructuring Plan" for the last quarter. Despite all these efforts, Fiat Auto closed financial year 2002 with losses of 1,343 million euros, although some indicators suggested that the relaunch plan was starting to take effect. The death of Giovanni Agnelli in January 2003 led to a state of confusion, which was aggravated by the official announcement, on the following February 28, of losses in the Fiat Group for the second year running. On March 10, 2003, Fiat Group stock was trading below its 1985 level. That same day, Boschetti, as he prepared for the Executive Committee meeting, told himself that all his plan needed was a little more time.