£330M review nears as WPP buys into Fiat media
WPP Group-owned Red Cell is understood to have bought a 49 per cent stake in the Turin-based Fiat Media Centre (MW last week).
The media centre handles Fiat’s media planning and buying in Italy and the acquisition is expected to trigger a £330m pan-European media review and possibly a creative review. Red Cell holds the account for Alfa Romeo’s advertising in Europe, while Publicis-owned Leo Burnett handles Fiat’s advertising.
Insiders say that the client is already reviewing its agency arrangements in Italy. The incumbent on the media business is Starcom MediaVest.
Meanwhile, the Fiat group has been involved in a high-profile dispute with General Motors over the ownership of the loss-making car division and the terms of a deal struck in 2000 that would have forced the US car giant to buy the business. GM has now agreed to pay Fiat Auto $2bn (£1bn), mostly in exchange for cancelling the clause.
Fiat performed badly on the Italian stock market this week, amid fears that the struggling car group faced difficulty meeting the terms of a €3bn (£2bn) convertible loan. The stock fell 11 per cent to record lows on the Milan stock exchange, before Fiat denied industry rumours. A company spokesman says that Fiat will return to profit in 2005, despite its recent difficulties.
This month, European Automobile Association figures showed Fiat sales were down 16.9 per cent in March, compared with the same period last year – the worst of any major car manufacturer.
Marketing Week revealed in August last year that the Fiat Auto group was embarking on a European review of the marketing and advertising for its Alfa Romeo, Fiat and Lancia marques as part of its strategy to return to profit (MW August 5, 2004).
Fiat posted a loss of €1.55bn (£1.05bn) for 2004.
