My '92 164 auto had a non-damper rack fitted (presumably for a manual 164), which was the cause of the left tyre rubbing on the gearbox. It was an eternal problem for the whole time I had the car, causing several Warrant Of Fitness failures. Someone in the past had welded two metal tags to the control arms in an attempt to restrict the movement of the hub - this worked until the tags became bent!
So I have no answer for this other than perhaps different-offset wheels (or spacers) and the use of a manual-trans steering rack. But even this doesn't help much - the turning circle on my manual 164 is still large.
It's more of a problem with RHD - not less - because when you do a U-turn, you're turning right. Few roads are wide enough! After a while you become adept at fast three-point turns (while other traffic waits patiently

) Left foot on the brake for such manoeuvres.
I think the Italians manage for two reasons - as Alfisto Steve says, they don't have the auto, and secondly they don't bother taking the 164 into town - they have a Punto like mine for that

Even on the Punto though, the turning circle is still over 10 metres which is disgraceful for a small car!
Maybe they do just use the handbrake. As it says in the 164 owner's manual, "...when setting the handbrake in "emergencies", it is helpful to keep the button pressed". I take that to mean that while doing handbrake turns, you should keep the button in, so as not to leave the wheels locked by mistake! Note that it is called the 'handbrake' rather than the 'parking brake' - no-one ever tried a 'parking brake' turn...
-Alex