Instead, Mr Romiti will be replaced this autumn by Paolo Fresco, for the moment the number two at America's General Electric.

ECONOMIST: Car making in Italy

Mr Agnelli, who took the reins earlier this year after the death of his older brother Gianni and the resignation of his appointed successor, Paolo Fresco, now has a clear strategy.

ECONOMIST: Fiat's latest efforts to save itself

The group, under Paolo Fresco, the chairman, and its chief executive, Paolo Cantarella, has begun a restructuring involving job cuts of 3, 000 in Italy, where Fiat's problems are most severe, and where it faces a price war.

ECONOMIST: Junked? | The