Fiat sees sale slump, will split off car division

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Fiat sees sale slump, will split off car division

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Grim predictions from Italy’s Fiat which expects car sales in Europe to fall 15 percent this year with the end of government incentives.

That came as it announced a first-quarter net loss of 25 million euros, which was a vast improvement on the 410 million euro loss in the same period last year.

Fiat is predicting that in its home market of Italy it will see sales fall by around 30 percent through the rest of the year.

Chief executive Sergio Marchionne unveiled plans to separate Fiat’s carmaking division from its other industrial activities and double production to 1.4 million vehicles by 2014.

He also praised new chairman John Elkann saying he has reached the right level of seasoning and maturity for that role.

Elkann will oversee Fiat’s five-year business plan, including new model launches and tighter integration with Chrysler.

Some motor industry analysts have questioned whether Fiat can turn around its struggling US partner

Chrysler – which is 20 percent owned by Fiat – has just reported a 147 million euro first-quarter net loss.

Its sales and market share continue to slide but it did manage an operating profit in the first quarter and said it was on track to break even this year.