Fiat begins talks on consolidation

LONDON - Fiat is talking to its four European creative networks about cost savings and a consolidation of its roster.

The car manufacturing giant, which spends £36m in the UK alone, wants to save money across its European operations following a difficult first half of trading. It has told agencies to come up with ideas to save money.

Agency sources said Fiat is looking to implement a more "efficient system" that could see a reduction in the number of creative agencies it uses across its Fiat, Lancia and Alfa Romeo brands.

Four agencies work for Fiat, with D'Arcy and Leo Burnett handling the bulk of the business. The Italian agency Testa works for Fiat in Italy, while the WPP network Red Cell handles Alfa Romeo's pan-European creative account.

The internal review will also involve below the line and media. However, with media already consolidated in one European network, Starcom MediaVest, it is unlikely that the account will move.

Barry Gibbons, Fiat UK's brand manager, confirmed that Fiat was looking at its agency relationships. He said: "Obviously, in the current climate it's an appropriate opportunity to ensure existing partners are offering full value for money."

Meanwhile, Alfa Romeo and Red Cell denied that Alfa is holding a pitch for its creative account. Alessandro Furfaro, the vice-president of marketing at Alfa Romeo, said it is still working closely with Red Cell. Lee Daley, the chief executive of Red Cell, said: "We have been concentrating on re-investing in our Alfa Romeo business, particularly on the creative side and the company is very happy with that."

Last year, D'Arcy picked up the Alfa business in smaller European markets where Red Cell does not have a significant presence. Red Cell had to pitch for an Alfa 156 assignment earlier this year, but retained the business.

Luca Lindner, Red Cell's former chief executive who was instrumental on the Alfa business, left the agency to join D'Arcy as its European chief executive this year.

Fiat, in which General Motors owns a significant stake, recently announced an operating loss of £80m for the second quarter of the year.

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