All eyes on Marchionne as he takes centre stage on Friday

Sergio Marchionne will be the centre of attention on Friday when he outlines the five-year road ahead for Fiat Chrysler Automobiles (FCA) in a detailed investor presentation near Turin, Italy.

As Chief Executive Officer, Marchionne has played a huge role starting with the transformation of Fiat since he took charge in 2004. Five years later, he was spearheading a drive to acquire Chrysler when it sank during the global slowdown. By 2014, the merger with Fiat was complete and FCA, led by the Jeep brand, has emerged a strong entity in the automobile arena.

Marchionne, who turns 66 on June 17, is scheduled to retire as CEO of FCA next year and it will be interesting to see who takes over. His successor will have to live with the reality of being constantly compared to his charismatic predecessor, who drafted an astonishing growth blueprint for FCA.

Crucial presentation

It also remains to be seen what Friday’s presentation has in store with speculation rife that it will signal the beginning of the end for brand Fiat while emphasising the growing role of Jeep in the new scheme of things. For those looking at the Indian context, it would be naive to expect something spectacular.

If the 2014 presentation is any indication, it is rather clear that the country is still a very small market in the FCA map even while it is one of the four global production hubs for the Jeep Compass (the others being Brazil, Mexico and China).

The irony is that Fiat has had a decades-long association with India but has never managed to make a mark despite some promising starts with brands like the Uno and Palio. It is only with the Compass that the turnaround story has begun after over two decades of getting it all wrong. In the process, it has established the Jeep brand in the market while Fiat has been relegated to the sidelines, at least for now.

From the viewpoint of the Compass’ right-hand-drive markets, India has a big role for FCA. However, Friday’s presentation will dwell on a host of other issues and regions. In all probability, it will only reinforce the role of Jeep in FCA’s future and perhaps some critical announcements on electrification initiatives while keeping in line with international trends.

Beyond all this will be the overwhelming presence of Marchionne. It will not be lost on anyone present that this will be his last big show as CEO before he steps down in 2019. During the last 15 years, he has made a huge impact on the global automobile arena.

Think of other charismatic CEOs in recent times and you have Carlos Ghosn of Renault-Nissan, Dieter Zetsche of Daimler, Alan Mulally, the former President of Ford and Akio Toyoda of Toyota Motor Corporation. It’s a niche list of visionaries who led from the front and Marchionne definitely finds a place here.

India connect

When he was two years into his role as CEO of Fiat, he had visited the Delhi Auto Expo in January 2006 and posed with Ratan Tata to signal a new alliance with Tata Motors. This was intended to give a new lease of life to Fiat, which had been languishing till then at a decades-old plant in Mumbai. The Tata-Fiat partnership would now start a new innings at Ranjangaon near Pune with joint manufacturing and retail.

Two years later, in September 2008, Marchionne had made a stopover in Delhi and it was during an Italian embassy dinner that this writer asked him if he was ready for an interview. The Fiat CEO agreed almost immediately and spoke candidly on a host of issues.

He said the company had always gone through phases where it was able to gather its resources and energies to fight the battle in a “marketplace that is changing at the speed of light”. According to Marchionne, what was evident in the last 12 months, as a result of changes in fuel prices, economic cycles and so on, was that it required tremendous dexterity from an organisation.

“A couple of things Fiat has managed to do now with some intelligence and luck is really see a position for the brands we have on the car side, which are absolutely consistent with consumer needs and demand,” he said. The real push and obligation for an organisation “such as ours” was to be continuously ready to try and change its position in the marketplace.

As Marchionne explained, the Italian market had a severe downturn in the first eight months of that year and Fiat had been able to compensate this “with some strength” in other markets. “We need to be continuously vigilant of our share and keep an eye on even the slightest shift in demand or in the moods and desires of customers,” he said.

Tata alliance

On the Tata alliance, Marchionne said the Indian ally had “certainly set the example” with ambitious projects like the Nano. “Their approach to globalisation is interesting and one of the great things that I found about Tatas is the vision and commitment they have to nation building in India, which somehow the rest of the world has forgotten,” he added.

Marchionne said India was also maturing into a global player without bullying its way into the arena but earning its right to be there. “It is a paced approach as opposed to putting your keys in the car and then just slamming the brakes. The problem with those kinds of economies is that when they hit the wall, they hit it real hard,” he remarked.

Of course, the Lehman crisis was around the corner and the world went into a tailspin soon after in 2009. As Detroit struggled to stay afloat, Fiat threw a lifeline to Chrysler and the rest was history, which culminated in the creation of FCA.

Meanwhile, there were attempts to reach out to General Motors for a merger though talks hardly progressed. The Chinese also saw the potential of the Jeep brand and companies like Great Wall Motors and Geely reportedly tried to get the attention of the FCA leadership. Will this happen sometime in the near future? After all, other global automotive CEOs have echoed Marchionne’s sentiments on the need for greater consolidation. Friday’s presentation will be something to watch out for.

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