Part 41 – The Colossus of Fiat
By David Cavaliere
It is impossible to overstate how important Fiat Automobiles S.p.A., or Fabbrica Italiana Automobili Torino, has been to the history of the Italian automobile. Yes, it is the largest automobile manufacturer in Italy and is part of Fiat Chrysler Automobiles. Throughout the 20th century, Fiat gained immense financial strength through exceptional vision, management and production innovation. It bailed out many manufacturers in Italy when they reached a level of financial distress and did so for Chrysler not too many years ago. It owns many of the most storied marques of Italy – Ferrari, Maserati, Alfa Romeo and Lancia. But just as Ford is credited with putting America on wheels, it was Fiat that did so for Italy. The company traces its history back to 1899, when the first Fiat automobile was produced (featured on May 5, Part 16 of this series Ceirano Fabbrica Automobili). Fiat has held a leading role in the automotive industry since its inception, which also heralded the dawn of Italian industrialization. From the moment Fiat products first appeared on the market, they were extensively developed and soon the products became well-known throughout the world.
The charter of Società Anonima Fabbrica Italiana Automobili Torino or Fiat, was signed on July 11, 1899. Giovanni Agnelli was on the Board of Directors, but quickly he distinguished himself as the company’s leader and managerial innovator. He was determined to make Fiat successful and had extraordinary strategic vision. These qualities led him to be selected as Managing Director of Fiat in 1902. He even drove an 8 hp Fiat that year in the second Italian Car Tour, setting a record during the race. That same year, Fiat driver Vincenzo Lancia (yes – that Lancia), won the Sassi-Superga uphill race in the famous Fiat 24 hp model.
In 1900, the first Fiat factory opened at Corso Dante in Turin, with a workforce of 150 people. Fiat produced 24 cars that first year, including the company’s first model – the 3 ½ CV. By 1904, a Fiat logo had been designed as an oval with a blue background. When Italy hosted the first Car Tour of the country, nine Fiats crossed the finish line. By 1910, Fiat was the largest automotive company in Italy – a position it has retained since. That same year, a new plant was built in Poughkeepsie, New York, by the newly founded American F.I.A.T. Automobile Company. Owning a Fiat at that time was a sign of distinction. The cost of a Fiat in the U.S. was initially $4,000 and rose to $6,400 in 1918, far more expensive than the Ford Model T, which cost $525 in that same year. Fiat continued to grow at a swift rate and soon the company expanded its product line to include trucks, commercial vehicles, marine engines and trams (street cars).
By the mid part of the second decade, Fiat gave a leadership position to Giacomo Malle Trucco, charged with the construction of a new production facility – the Lingotto factory in Turin. Work began in 1916, but the Great War delayed construction. The war brought hard times for many car companies, but Fiat’s diversification allowed it to thrive during the war by supplying the Allied Forces with aircraft, vehicles and weapons. It had begun to explore new production sectors before WWI began and continued to seek new opportunities following the war. It became active in electricity, public transportation lines, railways and the steel industry. A subsidiary was established in Russia and Fiat Lubrificanti was founded. There were labor problems in 1921, at one point the workers took over the Fiat factory, but by 1923, it back on the path of sound and sustained growth. Lignotto was completed and Giovanni Agnelli was now the Fiat CEO. When the factory was completed, it was the largest in Europe, with production on five floors and a test track on the roof. It was the first Fiat factory to use assembly lines. By 1925, Fiat controlled 87% of the Italian car market. Several new car models were released, including the four-seat 509. The company’s goal was to establish production efficiency and make cars even more affordable. The cost cutting by Agnelli helped to reduce production costs, but to sell more cars, Fiat established a holding company that allowed buyers to pay for the cars on an installment plan. The company also took care of its employees, establishing a health care plan and fitness centers in the early 1920s.
When Mussolini came to power in Italy, Fiat had to abandon many of its plans for an international presence, instead, it had to concentrate on producing cars for the domestic market. The two most important cars that Fiat introduced before WWII were the 508, better known as the Balilla, in 1932 and the 500, more commonly called the Topolino, in 1934. “Topolino” translates literally as “little mouse” in English, but is also the Italian name for Mickey Mouse. The car proved to be very popular, with over ½ million sold. It was powered by a 13 hp 569 cc four-cylinder, side-valve, water-cooled engine (Fiat later used an overhead valve motor) and had a top speed of 53 mph. It was offered in various series all the way up through 1955. The Balilla had a three-speed transmission (increased to four in 1934), seated four and had a top speed of about 50 mph. Its engine was also a side-valve of 995 cc with 20 hp. Such was the growth of the company that a new factory was need. This was to be the Mirafiori plant, also in Turin. It opened in 1937.
The Second World War caused the production of cars to end for the duration of hostilities. Fiat manufactured commercial and military vehicles, aircraft, weapons and machinery for the war effort. Giovanni Agnelli passed away in 1945 and The National Liberation Committee removed the Agnelli family from leadership roles in Fiat. In part, this was due to its ties to Mussolini’s government, but also because Giovanni’s grandson, Gianni, was not yet ready to assume the role of president. He would take charge in 1963 as general manager and would become chairman in 1966, a position he was to hold for three decades. In the post-war years, Vittorio Valletta was to lead the company as President of Fiat from 1946 to 1966. Valletta had been a professor of economics before he joined Fiat in 1921. He became a director in 1928 and CEO in 1939. Like the Agnelli family, Valletta found himself expelled from the company by the Unions, but in 1946 he was recalled and nominated as company president. His two decades at the company’s helm saw rapid expansion, as small Fiats proliferated on the streets of Italy. Valletta was to continue as Chairman of Fiat until the age of 83.
During WWII, many of Fiat’s factories were destroyed, but by 1948, reconstruction was in full-swing. Fiat’s profits increased and more employees were hired to fulfill the company’s commitment to innovation and research, always striving to make cars more affordable. The Fiat 1400 was introduced at the 1950 Geneva Motor Show. It was the first unibody Fiat automobile. The 1900 followed in 1952. The two models shared both the body and platform, but while the 1.4 liter 1400 was Fiat’s intermediate market offering, the upmarket 1900 had an enlarged 1.9-litre engine, more luxurious trim and equipment. It was to serve as the manufacturer’s flagship until 1959.
In 1957, Fiat introduced a new Cinquecento, a rear-engine two-door, four passenger city car. It was inexpensive and economical, powered by a 479 cc two-cylinder, air-cooled engine. Measuring less than ten feet long, the 500 is considered one of the first city cars. Production in various series lasted well into the 1970s, with nearly 4 million cars produced. This icon of Italian automotive production remains one of the most beloved cars of all time.
Next week we’ll look at how Fiat met the home market in Italy and expanded its production abroad during the 1960s through the 1980s.