Fiat CEO Sergio Marchionne announced a new programme to target major costs savings, when he spoke to shareholder's this week at the Group's AGM. He will seek to make further immediate savings by reducing staffing, the cutting advertising budget and rationalising research and development.

Meanwhile Fiat Chairman Luca di Montezemolo confirmed to journalists, during a press briefing at Maranello earlier this week, that a new Maserati 'crossover' segment vehicle is on the cards, a comment he made while discussing the short-term future for the newly joined Alfa Romeo and Maserati brands. He also underlined the importance of Fiat finding new strategic industrial partners to replace the now-dissolved agreement with GM.

SERGIO MARCHIONNE - MAJOR NEW COST SAVINGS THIS YEAR

“Fiat Auto has taken some steps forward but must accelerate its rate of recovery,” Marchionne told shareholders assembled for Fiat's the annual meeting, which was held in the company's hometown of Turin, Italy, earlier this week. The Fiat Group CEO, who earlier this year fired Auto Division CEO Herbert Demel and took over the position himself, was upbeat about prospects for the Italian carmaker. He is now seeking cost saving of 105 million euros this year by reducing wages by about a third through staff reductions and layoffs carried out under the government's compensation scheme. This figure he is targeting to rise to over 180 million euros in 2006.

Cutting away much of the advertising budget for this year will result in cost savings in excess of 150 million euros, while rationalising the research and development structure and programmes is expected to benefit the carmaker by a further 200 million euros.

LUCA DI MONTEZEMOLO - A MASERATI 'CROSSOVER' VEHICLE IS PLANNED

Meanwhile, on Wednesday Fiat Chairman Luca di Montezemolo briefed journalists at Maranello on the future direction of the Maserati brand, which is now being returned to Fiat Auto Division control after a seven year period under the tutelage of Ferrari.

"Maserati and Alfa Romeo will share platforms, components and sales networks," di Montezemolo told the assembled journalists. Sharing technology, marketing and sales networks, including in the United Sales, where new Alfa Romeo-Maserati CEO Karl-Heinz Kalbfell has just appointed the highly experienced James G. Selwa to organise a brand new import and distribution network for the two 'sporty' brands, will be a positive benefit to Alfa Romeo, reckoned di Montezemolo. "This will lift Alfa Romeo's market positioning," he added.
 

Maserati, which is targeting sales of 10,000 cars per annum by 2007, sold 4,600 cars last year, helped by the instant popularity of the new Quattroporte flagship saloon that has already gained a healthy waiting list. In 1997, the first year that Ferrari took control of Maserati, just 700 units were produced, and with a new Coupe, Spyder and V12 Quattroporte in the wings, this target looks achievable.

At the same time di Montezemolo confirmed the existence of a project to build a Maserati 'stationwagon'. This will be a highly sporty 'crossover', as is the current fashion. To reduce costs it will draw on an Alfa Romeo platform, components and technology. Two years ago Maserati presented the Giorgetto Giugiaro-styled Kubang GT Wagon 'SUV' concept. Although it found a favourable reaction from potential buyers, the cost of building it alone was too much for Ferrari to bear, and so the recent amalgamation of the brand with Alfa Romeo will allow this type of project to get off the ground.

LUCA DI MONTEZEMOLO - NEW ALLIANCES ARE A PRORITY FOR FIAT

Switching to the burning topic of new industrial alliances for Fiat Auto, di Montezemolo said that these "are an absolute priority in the car sector, that's what we must be after, both in the industrial and commercial spheres".

Ever since Fiat unpicked the alliance with General Motors several months ago, attention has focused on new partners with many names coming into the frame. These have included the Peugeot-Citroen Group, with whom Fiat have a long-running LCV joint venture, SAIC of China, who are casting around for European input, and Tata of India, who are believed to now be close to purchasing Fiat Auto's facilities in India. "The GM operation belongs to the past, we must focus on new alliances, optimising sales networks," added di Montezemolo. "The car sector is losing money, we must slow down this process, and then make it gain. The worst performing European car markets are Italy and Poland, where Fiat is strong. The situation will start improving in the second half of this year, with the launch of new models, such as the Alfa Romeo 159, the Fiat Croma and the new Fiat Punto."

Di Montezemolo further added that rumours that a Ferrari IPO was in the offing were untrue, and that Fiat (which controls 56 percent of Ferrari) had no plans to bring the 'Prancing Horse' brand to the market in the near future.