Fiat's 'human volcano'

Fiat always was a company dominated by engineers. A recent top-level appointment suggests that is going to change. The dynamics of Fiat Auto shifted one year ago, when the company named Juan Jose Diaz Ruiz its executive vice president for sales and marketing.

The 57-year-old Spaniard's mission is to supercharge the lackluster marketing of an automaker traditionally dominated by its engineers. He has the power to do so. In a major reorganization, Fiat's product planners now report to Diaz Ruiz. The automaker's goal: to develop cars more suited to the market.

To understand why Fiat Auto needs a better balance, look no further than the controversial Multipla. The car features an innovate space frame, but sales trail far behind the more popular Renault Megane Scenic and Opel Zafira. The quirky Fiat coupe and Lancia range offer additional evidence that engineering solutions do not guarantee commercial success.

Fiat engineers also failed to capitalize on innovations. In the 1980s, Fiat invented common rail fuel injection for diesels, but sold its patents to Robert Bosch GmbH. Thus, the Italian automaker failed to gain recognition for an invention that revolutionized Europe's car market.

Diaz Ruiz will not repeat those blunders. One colleague describes him as a 'one-man human volcano.' That was evident in June, when he told Fiat dealers about his marketing ambitions for Alfa Romeo, Fiat and Lancia. He likened Lancia with upscale jeweler Bulgari, Alfa Romeo to comeback fashion group Gucci and Fiat to such youthful brands as Ikea, Swatch and Gap. To reinforce Fiat's desired image, Diaz Ruiz will boost spending on marketing in Europe next year to $640 million, up 25 percent.

Diaz Ruiz has the credentials to make the plan work, starting with an ability to speak five languages. Few sales and marketing people know the sector as intimately. After gaining a business degree at the University of Warwick in England, he spent successful marketing stints at Ford Motor Co., Seat SA, Audi AG and Toyota Motor Corp.

He arrives at Fiat at an opportune moment. The launch of the Stilo this month marks a $12 billion product offensive that will produce 19 new models in the next five years. Fiat Auto wants to lift annual worldwide sales to 4.2 million light vehicles in 2008, up from 2.3 million last year.

Most of the Fiat brand's expansion will come from emerging markets in South America, Asia and central Europe, but the strategy also calls for Alfa Romeo sales to double and for the moribund Lancia to increase sales by 50 percent.

Perhaps most important, Fiat will shift its primary focus from small, low-profit vehicles such as the Seicento or Punto to larger, more profitable cars. The well-equipped Stilo, which will compete against the Volkswagen Golf, Ford Focus and Opel Astra, is a step in that direction.

As part of its Business Solutions thrust, Fiat will put more emphasis on such services as finance, insurance, leasing and telematics.

You can reach Richard Feast at autonews@crain.com

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