Fiat's senior managers, Group CEO, Sergio Marchionne, Auto Division CEO, Herbert Demel, and marketing boss, John Elkann, the grandson of the late Gianni Agnelli, have embarked to a tour of the carmaker's extensive South American operations.

The long distance tour by these top managers emphasises the growing importance of South America to Fiat. A large scale manufacturing operation is centered in Brazil, and as well as leading the local market, more than two and a half million cars have been exported. With Iveco, New Holland, Magnetti Marelli (who have just been handed a 'Quality of the Product and Logistics' award by VW Brazil), Teksid and Comau, all closely involved in South America, the importance of this region to the Fiat Group becomes even more apparent.

While Fiat is struggling to sell cars in Europe, in South America the brand, under the direction of Fiat Automóveis, is going from strength to strength, the Turin marque's balance sheet being greatly assisted by the positive cashflows it is now generating.

"The good performance that we celebrate today in Brazil, is made possible thanks to the positive nature of the Brazilian economy, especially in the area of exports," Sergio Marchionne told the Brazilian Minister of Foreign Trade, Luiz Fernando Furlan.

Fiat have been present in Brazil for the last thirty years, and the operation is second only in capacity to their Italian home base. Growth is continuing to rise sharply, in fact for the first nine months of 2004, turnover is up 43 percent year-on-year.

To cope with the ever increasing demand, Fiat Automóveis have recently taken on an additional 1,500 staff, bringing the total workforce up to 24,500. Fiat Automóveis now exports 20 percent of production, while the New Holland division ships out of Brazil 35 pecent of the tractors it builds in there.

Exports are up 57% this year, the Brazilian arm having now now seen more than two and a half million vehicles head out of the country.

Among the models currently being exported successfully is the new Fiat Strada Malibu, a 'lifestyle' version of the popular pick-up, which is in fact now sold across Italy.
 

Fiat Automóveis currently have customers in fifty countries, taking twelve different models. Biggest customer is Argentina, who account for 42 percent of all exports, followed by Chile (15 percent), Italy (6.9 percent) and Mexico (6.7 percent). Recently Fiat have reopened assembly operations in Venezuela, after a five year break.

These exports include the 'World Car' range, made up of the Palio (hatchback), Siena (saloon) and Strada (pick-up). This project, to create cost effective, practical cars that are embedded with Italian qualities of flair and styling, has been hugely successful in South America.

The Stilo, a recent winner of Brazil's prestigious 'Car of the Year' award, is a highly popular leader in its segment, while other strongly selling models include the Doblo, Ducato, and even the little Uno, recently facelifted and still selling well in South America. Locally it is known as the 'Novo Mille'.

Fiat are targeting $80 million of Braziian exports for this year, double that of 2003, with $100 million the objective for 2005. Fiat Automóveis boss, Roberto Vedovato believes that the South American economic outlook is now turning positive, ending a difficult few years for the region.

Emphasising the key strategic position that Brazil will play in Fiat Auto's future, Sergio Marchionne announced an immediate investment of 1.1 billion dollars in new products and technology. This will rise to 4.5 billion over the next decade.

Fiat see Brazil increasing its global importance to their carmaking operation. Increasing technical and engineering ability in the region will lead to stronger products.

Powertrain, the GM-Fiat joint venture is relocating some of their activities to Brazil, a move which is welcomed by GM, who previously expressed interest in taking over Fiat Automóveis' manufcturing facilities. Production of the long running Fiat 'Torque' engine is also being shifted from Italy to Brazil.