MILAN -- Italy's Fiat on Wednesday unveiled a slimmed-down structure for its auto business, scrapping units set up in a previous reorganization in a bid to speed up decision-making at its money-losing core unit.
In the first major shake-up since Chief Executive Sergio Marchionne was nominated in June, Fiat did away with a structure in which the automaker's brands were virtually autonomous, a system long criticized for its inefficiency, duplication and high costs.
Fiat, Italy's largest industrial group, described the changes as a "move beyond the old hierarchical structure".
But analysts said the long-expected move would have little short-term impact on sales.
"Just because you change your management doesn't mean consumers will start buying your cars," said analyst Adam Jonas at Morgan Stanley in London. "But it does address some of what Marchionne said in his first meeting with analysts."
Marchionne, formerly head of Swiss inspection services group SGS, said in July that Fiat's current structure was inadequate to meet targets laid out in a turnaround plan drawn up by previous management.
The plan makes Fiat Auto CEO Herbert Demel chief executive of the Fiat car brand as well, on an interim basis. Other top executives after the restructuring include Daniele Bandiera, head of the Alfa Romeo brand, and Luca De Meo, head of the Lancia brand.
Gianni Coda, formerly head of the Fiat Lancia unit, becomes head of purchasing. An outsider, Johann Wohlfarter, the former head of Autogerma -- the Italian importer of Volkswagen, Audi, Seat and Skoda -- has been named head of network development and coordination. "It seems Demel is trying to institute a team he knows personally, and in some cases people that he has worked with at Audi," Jonas said.
A Fiat spokesman declined to comment on possible cost savings from the new structure.
"Overall, it doesn't seem all that important to me. It's part and parcel of a broader restructuring," one Milan analyst said. "It just seems individual bosses have had their powers curtailed."
Fiat Auto dragged Italy's largest industrial group to a record loss in 2002 and is still struggling to reverse a sales slump, despite having four new models on the market -- part of a recovery plan drawn up by former CEO Giuseppe Morchio.
Official data on Italian car sales for August are due to be published on Friday. Industry sources have said the overall figures for Fiat's key domestic market will be flat on the same month in 2003.