Fiat, the Italian automobile manufacturers, has finally obtained approval from shareholders on Thursday to separate its industrial units from its automotive units.
Earlier this year, in April, the Fiat Group had announced that they were planning to split the industrial unit that manufactured the Iveco trucks, and agricultural and marine equipment from its automobile ventures which include the Fiat, Fiat, Lancia, Alfa Romeo, Ferrari and Maserati car brands, as well as Magneti Marelli and Teksid auto parts, Comau robotics and FPT Powertrain Technologies.
The Group hoped that investors would see the split as a positive outcome that would put the company at a strategic advantage and resolve issues that had been troubling the company for some time now. The industrial business is viewed as more profitable by the market because it involves low costs of research and development and high margin profits.
The Group’s president, John Elkann, was appreciative of the shareholder’s support in making the split happen. The Fiat Group was started by Giovanni Agnelli, Elkann’s grandfather, in 1899. Today, it is the world’s sixth largest carmaker and Italy’s largest carmaker and private employer. Last year, the group bought a 20 percent stake in the American automaker, Chrysler, when the latter was filing bankruptcy. It gives Fiat the right to raise its stake by 51 percent which is subject to it meeting its performance standards. Sergio Marchionne, the CEO, is confident of Fiat making its fray into the global automobile market and said that it was an opportune time for car makers.