This is the decade for centennial party time across the car industry. The celebrations for the combination of four wheels and an internal combustion engine, however, have been muted. A business that began about 100 years ago in Europe as a cottage industry often run by families is now run by consolidated multinationals, most of which suffer from the problem of global oversupply. Yet two of Europe's major car manufacturers remain under family control: BMW, an athletic stripling of only 86, and Fiat, which is really feeling every one of its 104 years.
The Quandt and Agnelli clans control two middling producers on the world scene, punching out about a million (BMW) and two million (Fiat) cars respectively. In Europe, Fiat has about 7.4% of the car market and BMW 4.3%. Size is no guarantee of success, though. Whereas BMW, now with Rolls Royce on stream, may be at its zenith in terms of the success of its products, Fiat is in severe distress.
BMW posted its biggest ever profit of Eu3.3 billion in 2002 (and is on target for new record profits, and sales, in 2003), while Fiat recorded a loss of Eu4.3 billion in 2002, the year its patriarchal boss died. The broader picture in Turin is grim. Since 1990, Fiat's share of the European market has halved and, worse, its share of the vital home market has plummeted from well over 50% in its heyday to less than 30% last year. What has gone right and wrong for these two dynasties, and how have they ended up in such contrasting states?
When Fiat boss Giovanni Agnelli - the founder's grandson - died last January, more than 100,000 mourners paid their respects as his body lay in state. His coffin was applauded as it made its way to Turin cathedral, and Italy's leading newspaper Corriere della Sera devoted its first 19 pages to his life and times. The funeral was attended by prime minister Silvio Berlusconi who, not for the first time in his political career, put his foot in it by arriving in an Audi. The mourners booed.
Agnelli, l'avoccato (the lawyer), as he was known, was a wastrel in his youth, but he squared up to his responsibilities once in the driving seat at Fiat. He became Italy's leading businessman, a lifetime senator and, for many, the uncrowned king of Italy. Agnelli enjoyed trysts with film stars, was a friend to the Kennedys, Henry Kissinger, Richard Nixon and the Rockefellers, and turned the family firm into an international conglomerate.
By contrast, the BMW godmother, Johanna Quandt, 76, is silent to the point of secrecy over her family's £12 billion controlling interest in the German carmaker. She has reputedly never given an interview, and neither have her children, and fellow shareholders, Stefan and Susanne. Collectively, their stake amounts to 46.6%. Stefan, now the largest single shareholder, is said to be next in line for chairmanship of BMW's supervisory board.
Susanne, who worked at the Regensberg plant, changed her surname to Cant to avoid recognition.
Although the Quandts appear to take a relatively passive role in BMW, they hold the key to the firm's continued independence. That independence was rumoured to be under threat during the late '90s when, after the Rover ownership debacle, Ford began to take a close interest in the company.
But if Fiat is in serious trouble today, its position is not as dire as BMW's was in 1959. The German company struggled to get back on its feet after the war, its factories having been dismantled for war reparations.
But by the mid '50s, it had launched a trio of cars: these were a motley bunch - the 501 and 502 (a huge limousine known as the Baroque Angel) were far too thirsty for that fuel-starved era, and the beautiful 507 roadster was an expensive flop.
To compensate in the short term, BMW built the tiny Italian austerity-chic Isetta bubble car under licence, in a deal similar to the arrangement it had with Austin in 1929 to build the first BMW car, the Dixi. BMW knew it had to produce a car positioned between these extremes, but struggled to find the money to do so. In 1959, on the brink of being taken over by Mercedes, it was saved by the acquisition of a major stake by Herbert Quandt, who celebrated by marrying his secretary Johanna. (The family shareholding dated back to the '20s and the historic publicity-shyness of the Quandts may be connected to the fact that Herbert's step-father was Joseph Goebbels.)
Quandt's backing enabled the Neue Klasse 1500 to be developed, a quality, compact car whose character set the die for every BMW since - sporty saloon motoring for the middle classes. BMW recovered sufficiently to launch the smaller 02 series in 1966, which developed into the famous 2002. This was replaced in 1975 by the first generation of the 3 series that we know so well today.
Now a hugely successful model, the 3 series prompted accusations that BMW is a one-product company. It has long attempted to be more than that - its 2500 saloon, announced in the same year as the 02 series, was intended to take on the large Mercedes saloons - but it is only after several iterations of these big cars that it has got on level terms with Mercedes.
Today, BMW is fast filling all kinds of niches as the car market fragments to meet the demands of consumers who want their cars to be more individual.
Besides the classic 3, 5 and 7 series, essentially the same saloon in different sizes, it offers coupe, estate and cabriolet versions of some of these cars, two four-wheel-drives, a sports car and a big coupe. It is a well-planned, coherent range with brand values so strong that sales have weathered the controversy surrounding BMW's new design language - see the new 7, 5 and Z4 - almost unaffected.
BMW has rarely been short of Teutonic confidence. As its chairman Dr Helmut Panke said recently: 'We operate in the most promising segment of our industry - worldwide, the premium segments will grow roughly twice as fast as the mass segments in the last decade. We do not build, and will never build, boring cars.'
Among the masses, the Fiat story is never boring, either. It, too, has enjoyed spectacular success at times. Fiat SpA - of which carmaker Fiat Auto is a part - is still Italy's biggest single conglomerate, with a turnover representing 4.8% of the country's GDP. It owns businesses ranging from newspapers to farm machinery.
The Fiat group has long been a diversified business - it was manufacturing commercial vehicles, marine engines and ball-bearings as long ago as 1902 - but for most of its history, car-making has been at the centre. Says Professor Garel Rhys of Cardiff Business School: 'Fiat had to create the industrial revolution in Italy.'
Where BMW's brand character is refined, aspirational, haughty and even arch, Fiat's brand character has its roots in the 1936 Topolino (little mouse), whose low price sped the motorisation of Italy. But the company's most famous car is the 1957 descendent of the Topolino, the Nuova 500, a cute, twin-cylinder bubble-like car of which more than 3.6 million were sold. It played a major role in the so-called 'economic miracle' in post-war Italy.
Fiat's failure to crack the market in bigger, more profitable cars goes some way to explaining why the company is in trouble. Whereas the margin on a BMW 3 series is a manufacturer's delight (and even more so on a 7 series), that on a Fiat Punto is tight. This failure has also led to an over-dependence by Fiat on one model. Today, that is the Punto, now in its second generation; before that it was the Uno - which rescued the company from another crisis in 1983. Before the Uno, it was the 127.
Fiat also owns Lancia, which it bought for 10 lire in 1969, and Alfa Romeo, acquired in 1986, but its success with these brands has been inconsistent.
Fiat's car division was starved of money through the '70s, not least because the group was short of cash. At Agnelli's invitation, the Libyan government bought 10% of Fiat for $415 million, later adding another 4%, enough to win it two seats on the board. The arrangement persisted until 1986, when terrorist allegations surrounding Libya had the US blacklisting Fiat, and Agnelli had to raise $3.1 billion to buy the Libyans out. Investment was turned up again, but car design takes time and the new Uno did not appear until 1983. Fortunately for Agnelli, it was a great success.
Agnelli could not be accused of lacking vision. When he took control, many considered Fiat 'too big to be Italian, but too small to compete in Europe'. One of his greatest achievements was to make Fiat an international conglomerate, bringing together Case New Holland (the world's largest farm equipment manufacturer), Iveco trucks and the newspaper La Stampa.
Yet a more committed approach to car exports might have proved a more valuable investment. Although Fiat had considerable success in Russia and central Europe, it had to withdraw from the US: unreliable products led to the joke: 'Fix It Again, Tony'.
But neither has BMW done everything right. In 1994, it embarked on a brand diversification strategy that was nothing short of startling - it bought Britain's troubled Rover Group. The objective was to provide the company with a portfolio of volume brands to complement its premium marque.
So, it not only got the tarnished Rover badge, beloved only of the British pipe-and-slippers brigade, but also Land Rover, MG and Mini.
It knew it had bought a business in need of massive investment - which it provided on a scale not seen in decades - but it hadn't bargained on the in-fighting this provoked, both between BMW and Rover, and within BMW itself. At the Birmingham motor show launch of BMW's first Rover, the 75, boss Bernd Pischetsrieder heavily criticised the Longbridge plant with the intention of scaring the workforce into submission. It was a serious misjudgment.
Media analysts and workforce alike believed that BMW was giving up on the 'English Patient', and Pischetsrieder and his number two, Wolfgang Reitzle, were forced to resign from the company on the same day in February 1999. BMW then took direct control, flying in planeloads of executives from Munich to Birmingham to 'purge' the place, seriously damaging morale. Little more than a year later, BMW disposed of Rover and MG to the Phoenix Consortium, and sold Land Rover to Ford. It retained the Mini brand and produced a successful updated version of the legendary marque.
Since ditching Rover, BMW's margins, sales and profitability have blossomed.
It recently announced plans to sell 1.4 million vehicles annually by 2008 - only 400,000 short of its target when Rover was still on board. Its share price is buoyant, and mutterings that the Quandt family want out have ceased. But growth will come in large part from the forthcoming BMW 1 series, which will compete at the premium end of the Ford Focus segment.
It was this very car that Pischetsrieder, and many others at BMW, felt was a stretch too far for the brand and would compromise its premium character. It was the reason for buying Rover.
Meanwhile, Fiat, to the surprise of some analysts, is intent on pursuing a strategy closer to BMW's, by concentrating on the car business. Umberto Agnelli, Gianni's younger brother, is in charge after a series of family tragedies. First, the highly regarded Giovanni Alberto Agnelli, who turned Vespa-maker Piaggio around, died of a rare form of stomach cancer in 1997 aged 33. Then Edoardo, Agnelli's son, committed suicide in 2000 after an unhappy life that included heroin addiction.
'Crazy Eddie', as he was known in New York, had become increasingly unhappy at seeing his younger relatives given preferment. In an interview with the left-wing daily Il Manifesto in 1998, he complained that 'part of my family has been overtaken by a baroque and decadent logic. Meaning no offence to anyone, we are approaching the gesture of Caligula, who made his horse a senator'. This was thought to be a reference to his now 25-year-old cousin John Elkann, the hot tip to take over the reins when he is fully groomed.
Many thought that Umberto, now 69, was keen to sell Fiat Auto. But he and chief executive Giuseppe Morchio concluded that it was car-making and the industrial businesses that generated by far the biggest chunk of Fiat's Eu55 billion turnover. In a programme of disposals in 2003, the Toro insurance company was sold, along with Fiat Avio and 51% of Fidis, Fiat's retail finance arm. The Agnelli family invested Eu250 million as part of a recapitalisation plan that has yielded Eu1 billion in total.
Shareholder GM did not subscribe to the recapitalisation, with the result that its 20% share has halved. Fiat's link with GM was forged in 2000, amid the possibility that Fiat might be sold to DaimlerChrysler in a $13 billion deal that would have given the Agnellis a 26% share in the German company. Umberto favoured the deal but Gianni did not, and Fiat remained in their hands. But it gave rise to the idea that Umberto wanted out of the car business; not so, says a Fiat insider - he just thought it a good deal.
The GM deal famously included a put option that could have forced the American giant to buy Fiat during 2004, but GM now argues that Fiat's restructuring invalidates the put. Fiat, which has sold its 6% holding in GM, argues otherwise, but the two have postponed the discussion for a year, not least because they have a highly successful joint venture covering purchasing and powertrain development.
Fiat claims it will recover without GM's money, with break-even during 2004, positive cashflow in 2005 and a 4% return on sales by 2006. The group also plans to launch 24 new models by 2010. This despite the failure to make redundancies on anything like the necessary scale and a shrinking European market pressured by discounting. Morchio also values Ferrari - part of Fiat SpA rather than Fiat Auto - as an R&D centre; although Fiat sold 34% of the company, it retains more than 50%.
If that suggests a Fiat wealthier than it appears, bear in mind that this company has many assets beyond car brands. With Iveco trucks, Comau - the global number one in automation systems for the auto industry - and Magneti Marelli, a car components supplier, Fiat has a turnover of Eu55 billion, Eu23 billion of which is accounted for by Fiat Auto. Despite being owned by Fiat, Italy's second-largest power producer Edison is not consolidated into the accounts. It's valuable and could also be sold.
Just as Fiat is more than cars, the Agnellis are more than Fiat. The family owns the supermarket chain La Rinascente, Juventus football club and even paper manufacturer Arjowiggins. The constitutional rules of these companies state that shares can be sold only to other family members, thus protecting the business. So, although Fiat has been in deep trouble, and has not left it behind, it has a substantial safety net.
But there's a lot of ground to be made up. Alfa Romeo is a great brand name, which during the 1960s was a model for BMW to emulate. Fiat saved it from the near-terminal effects of a cash drought during its state ownership, but poor after-sales service and a model range based on Fiat platforms has held it back.
Lancia was once great too, but has been allowed to atrophy and retreat to its home market. As to Fiat itself, there has been recent good news with the new Panda, which has just won the European Car of the Year award and has a fat order book. But if Fiat cannot make a success of small cars, it is doomed.
So both families have problems to address. MT's contributing editor and car observer Stephen Bayley has watched both companies for years: 'Family ownership of Fiat and BMW is only one contributor to their distinctive personalities. For good or bad, they reflect national characteristics: Fiat's strength and weakness was a distribution system based on village blacksmiths selling to customers with loyalties as fierce as arrabiata.
BMW is a classic German Mittelstand business selling increasingly irrelevant technological Bratwurst to the image-conscious. Fierce competition threatens the first, changing taste the second. In future, it will be "family hold back" and let new products do the work.'
1889: Fabrica Italiana Automobili Torino founded in Turin; 35 workers produce 24 cars in first year with Giovanni Agnelli, ex-cavalry officer, as secretary to the board.
1902: Diversification begins with listing on Milan stock exchange to raise capital. Commercial vehicles, marine engines, cabs, trams and even ball-bearings are produced.
1908: Incorporated in US. Manufacture under licence in Poughkeepsie, NY.
1922: Lingotto factory opens, based on Ford's production-line concept. Le Corbusier calls it a 'cathedral of technology'. Its rooftop test track appears later in the film The Italian Job.
1936: Fiat Topolino launched. It is the smallest mass-produced car in the world at the time and Fiat goes on to build half a million.
1945: Giovanni Agnelli dies.
1950s: Italian 'economic miracle', epitomised by success of the Topolino - produced until '55 - and the Nuova 500 (above), introduced in '57. Over 3.5m 500s are made before its demise in 1975.
1966: Giovanni (Gianni) Agnelli takes over. Brief merger with Citroen makes it the world's third-largest car maker. Introduction of the Fiat 124. Agnelli signs deal to construct a factory at Togliattigrad, Russia, to build the 124 (Lada). Total production is about 15m, making the 124 the third most sold car of all time.
1969: Industrial unrest in Italy during the 'hot autumn' affects Fiat badly. Production hit by wildcat strikes, nearly 20m man-hours lost and dividend cut for first time since '45. Fiat buys Lancia and half of Ferrari.
1970s: Fiat target of far-left terror attacks, which kill four managers. Agnelli says Italy is in danger of becoming 'another Argentina'. Cars like the 128, X1/9 and 131 acquire reputation for rust and unreliability; mechanics coin the acronym 'Fix It Again, Tony'.
1980: A long period of industrial unrest ends when 40,000 workers, engineers and executives march silently through Turin, pleading for an end to disputes. Agreement is reached the following day.
1983: Under the control of two bosses, Cesare Romiti and Vittorio Ghidella, the Fiat Uno arrives and is a huge success. Bank debts are eliminated and Ford is keen to merge Fiat with its European operation.
1986: Fiat buys Alfa Romeo. European market share at all-time high of 14.6%.
1993: Financial crisis leads to a £1.6bn recapitalisation by Fiat's bankers.
1997: Giovanni Alberto Agnelli dies, aged 33. Turned scooter-maker Piaggio around and was expected to take over the helm of Fiat in '98.
2000: Fiat sells 20% stake to GM for £1.6bn, plus a put option to sell the US giant the remaining 80% in early 2004. The deal includes an agreement to collaborate on powertrain development and purchasing with GM Europe.
2001: Falling car sales force new diversification programme.
2002: Record group losses of Eu4.3bn as Fiat's share of the home market falls to 32% from 44% in 10 years. Share of the European car market falls to just over 8%.
2003: Death of Gianni Agnelli. Younger brother Umberto takes over as chairman. Car sales fall whopping 16.4% to 362,436. Company recapitalises, but GM declines to subscribe.
2004: Launch of new Panda in UK, on which the future hopes of Fiat Auto rest, along with the Fiat Idea and new Lancia Ypsilon, and the appointment of Austrian Herbert Demel as CEO.
July 1917: Bayerischen Motoren Werke (BMW) builds large plant next to Oberwiesenfeld airfield in Munich to produce aircraft engines for war effort.
1929: BMW produces its first car, an Austin 7 clone called the Dixi, built under licence at works in Eisenach.
1945: After the war - during which BMW built thousands of aircraft engines - the works at Zuhlsdorf are closed and dismantled. The Munich plant is destroyed in a 1944 air-raid, but the Allach plant stays open to repair US army vehicles.
1955: Suez oil crisis and a need for new models leads to BMW's equivalent of the Fiat 500, the Isetta bubble car, 2.29 metres long and powered by a 12-13hp engine; 160,000 sold during the '50s.
1956: BMW 507 Roadster. Movie-star styling, 3.2 litre V8 engine and 125mph top speed, but it's a flop. Only 252 are sold.
1959: BMW very nearly goes out of business, but independence is maintained when Herbert Quandt (1910-82) takes a majority stake. The Quandt family remains in control to this day.
1961: The Neue Klasse 1500 saloon debuts at the Frankfurt motor show. The car from which all modern BMWs descend; more than 364,000 models are produced over the next 11 years.
1966: BMW buys Glas Cars, converting its Dingolfing plant to BMW manufacture, allowing significant expansion.
1970: Eberhard von Kuenheim, 41, becomes head of the BMW board until the late '80s, by which time turnover has grown 18-fold.
1972: Birth of the 5 series, the first real challenger to the staple Mercedes saloon. South African factory, which today produces many BMWs for Britain, established.
1975: Birth of the 3 series, the model that cements BMW's mass-exclusive appeal; about 7m sold over the next 25 years. Ad slogan 'The Ultimate Driving Machine' coined by BMW North America.
1987: 3 series Touring, BMW's first five-door car for nearly 20 years; 5 series Touring follows shortly after.
1994: BMW acquires ailing Rover group for £800m with plans to revive the brand, develop Land Rover and replace the legendary Mini.
1995: First US factory at Spartanburg, Carolina, built to manufacture Z3 roadster.
1998: BMW acquires the rights to the Rolls-Royce name from Volkswagen. Starts planning new models and a Rolls-Royce car factory to be built at Goodwood, West Sussex.
1999: BMW X5, the company's first SUV, is launched. It is manufactured at Spartanburg plant.
2000: Rover and MG are sold to a management-led consortium for £10. Land Rover is sold to Ford for £1.8bn, but BMW retains the Mini brand and finishes development of the Range Rover. The Rover debacle is said to have cost BMW £2.5bn.
2001: Hams Hall engine plant opens near Birmingham to supply all BMW four-cylinder engines. Originally, it was to have supplied Rover too. The new British-built Mini is launched. A £600m plant in Leipzig is announced, which will make 3 series cars from 2005.
2002: The latest 7 series - produced by controversial head of styling Chris Bangle - receives mixed reviews. Worldwide car sales reach 1.05m, including 120,000 new Minis.
2003: Bangle's fifth-generation 5 series appears, the latest hi-tech weapon in the campaign to take BMW sales to a targeted 1.4m by 2008.
2004: Launch of the new luxury 6 series coupe, the X3 small SUV and the entry-level One series.