The Fiat Group , established in the year 1899 was one of the founders of the European Automobile Industry. It was developed under the leadership of Giovanni Agnelli and made a successful presence in the Italian market as well as the international market. The Fiat Group is now managed by Sergio Marchionne who is the CEO presently.
The Agnelli Family still controls Fiat by owning 30% of the shares for the Fiat Group.
Fiat also made acquisitions with Ferrari and Lancia in 1969 , Alfa Romeo in 1986 and Maserati in 1993 and considering this a decision was made to diversify towards the public transport .This was a crucial issue the company faced as it reduced the opportunities to make profit from its automobile sector which was their core business and the company faced heavy losses.
The problems faced by the Fiat Group in the year 2002 due to the decreasing sales and unnecessary diversification in other areas resulted in low financial results of the company. Due to this financial crisis the company announced staff reduction in order to reduce costs and also closure of some of its businesses. All this led to only further problems in the company like employee's dissatisfaction, low morale and loss of trust.
Other issues faced by Fiat during its crisis period to the various factors like poor management, lack of control on their marketing strategies, ignorant of the market needs/ competitions and so on, which led to the downfall of this world class reputed company.