Fiat has returned to profit with strong performances by luxury brand Ferrari and its spare parts business.
Net profit in the first three months of the year was 29 million euros compared with a 25 million loss in the same period last year.
Chief Executive Sergio Marchionne surprised investors by announcing the Italian carmaker has cut its debt and he said the company will be able to absorb the impact from supply shortage problems following the Japanese earthquake. As a result his trading profit target for this year remained unchanged.
Fiat is predicting its core brand will increase its share of the European car market in the second half of 2011, while robust sales in Brazil and in the light commercial vehicles sector have offset weak car sales in Europe.