Fiat in Fourth

Automakers have had a bad year all over Europe--except in Italy. There, auto-industry sales in the first nine months of 1967 were up 17% over last year's record business. Just seven years ago, there was only one car for every 25 Italians; by the end of this year, there will be one for every seven. The exasperating urban traffic jam has become a national horror. Historic piazzas have been turned into huge parking lots. Ancient Roman roads are being lined with more and more service stations. From Milan in the north to Messina in the south, the car is king.

Nowhere was Italy's automania more evident last week than at Turin's 49th annual International Motor Show. Huge crowds packed 580 displays from 15 nations, including the Soviet Union. Most popular of all, with its dazzling display of models in attractive shapes and sizes, was Turin's own Fiat, which is having its best year ever. At home, Fiat has cornered 75% of the market. Last summer its annual production moved past the million mark, and it eased ahead of Volkswagen as the leading carmaker in Europe--thereby becoming the world's fourth largest producer (after G.M., Ford and Chrysler).

Bigger & Faster. Fiat, says Chairman Gianni Agnelli, owes its success to "a policy of production most suitable to the situation." What he means is that when the Italian economy was in low gear, Fiat built small cars--robust, versatile, economic. But since its 1964 slump, the economy has been picking up speed, and now Fiat is too. Its cars are getting bigger and faster. Tiny, 500 cc. to 600 cc. "Mickey Mouse" models are giving way to huskier, 1,000 cc. to 1,500 cc. sedans that now account for 34% of production. And demand for the bigger, more powerful cars is increasing steadily. With fatter paychecks in their pockets, 4,000,000 Italians now take to the new, no-speed-limit autostradas for "il weekend." They want something a little bigger than "Mickey Mouse" to carry luggage, baby carriages and bambini.

Others besides Fiat are trying to sell them what they want. Common Market tariff reductions have brought increasing competition from abroad, and now Fiat, for the first time, is about to be challenged by an Italian firm. State-owned Alfa Romeo, which has decided to produce low-priced, medium-sized cars, is building a plant called Alfa Sud near Naples; it expects to turn out 300,000 cars annually by 1971.

Fiat, which objected to a "fragmentation of the industry," fought hard to stop the government-sponsored Alfa Sud project. But Alfa President Giuseppe Luraghi was the better lobbyist. "By 1981, automobile production in Italy will double to around 2,600,000 cars," said Luraghi. "We intend to participate in that market, and we hope to have at least one-fourth of it."

Showing the Flag. Fiat is looking well beyond Italy. Its marketplace is all of Europe, and Fiat-style cars will soon be seen even in Russia, where the company is helping to build a plant. Besides, Fiat has succeeded in becoming the biggest non-American automaker without seriously tackling the largest of all markets, the U.S., where it now only "shows the flag" with a token 15,000 sales a year. That may change. But for the moment, says Enrico Minola, Fiat sales manager: "We are straining our capacity. We don't need the American market."

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