A Fiat in Ivan's Future

In their recent flirtations with capitalism, the Soviets have begun to cast covetous glances at that quintessential product of the consumer economy: the automobile. Russia has only one car for every 300 people, v. one for every ten in Western Europe and one for every three in the U.S. The Soviets are none too pleased about the disparity, and lately they have become highly interested in the capitalistic theory that big-time car production creates many jobs, which in turn gives people the money to buy cars. Last week the Russians decided to call in some Western automotive technology. In Moscow, Soviet leaders signed an agreement "in principle" with Fiat, Italy's biggest private company, for "cooperation" in auto production.

Returning to Turin in triumph, Fiat's normally aloof President Vittorio Valletta, 82, was cagier than ever, refused to discuss particulars. But if a great many details can be worked out, Fiat will build and help to staff the first fully Western-designed auto company on Soviet soil. (When Russia began producing autos in the 1920s, it bought some machinery and hired engineers from Henry Ford.) Officials of Fiat, which sells more cars in Europe than any other manufacturer, believe the agreement gives them a substantial lead over competitors in the only major untapped auto market left on the Continent.

This is the latest success in Fiat's quiet but persistent campaign to drive through the Iron Curtain. In Rumania, Fiat sold several thousand cars last year, has begun setting up a network of service stations and offices to supply spare parts. In Czechoslovakia, Fiat's annual sales also run to thousands of cars. In Poland, the company is nearing an agreement to license the Poles to produce their own Fiats; by 1970 the Poles plan to turn out 50,000 a year.

Ultimately Fiat hopes to accomplish throughout Eastern Europe what it has in Yugoslavia. There it helped build a major auto plant in 1954, still collects licensing fees for technical assistance. In Russia, Fiat is also pressing to get long-term licensing fees. The Russians in the past have opposed that, but economists of the Liberman school lately have advocated license deals as a way to draw upon Western technology.

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