MILAN - Italian new car sales surged almost 30 percent year-over-year in March as people rushed to take advantage of incentives, data showed on Thursday, while industry bodies clamoued for the tax breaks to continue.
Italy's struggling carmaker Fiat garnered 28 percent of its home market, slightly off a historic low touched in February, but failed to keep pace with the overall market and posted a 13 percent increase in sales.
Data from the Transport Ministry showed Italian dealers sold 269,800 cars last month, up 27.4 percent on a dismal March 2002, and bucking the European trend for falling car registrations.
Industry bodies Anfia and Unrae warned that sales could fall by more than 20 percent in April if the government does not extend incentives on eco-friendly cars.
The scheme -- introduced to help boost Fiat sales -- was extended to the end of March after an original December 31 deadline. The government is due to discuss another extension at a meeting on Friday, and Industry Minister Antonio Marzano already has said he is in favor of continuing the plan.
"Without state help, it is obvious that the market will contract sharply from the beginning of April," said industry body CSP, pointing out that consumer confidence is near nine-year lows and people need incentives to fork out big sums.
CSP said 66 percent of dealers expected sales to drop off in the next few months and that salesmen's confidence had waned.
The rush for incentive deadlines saw Fiat sales spike higher in December and March, but they have worked more to the advantage of foreign carmakers, such as Peugeot-Citroen, whose bubbly C3 compact car helped almost double its Italian sales in March.
Fiat's output has been hampered over the last two months by a flood in an engine factory, but a spokesman said the group -- which also owns the Lancia and Alfa Romeo marques -- had received more orders than expected in March.
Traders and analysts welcomed the fact that Fiat had not lost any more market share.
"The fact that they kept their market share at around 28 percent I would see as quite an encouraging sign," said Gianluca Pediconi, an analyst at CSFB in Milan. "It looks to me that from April and May they should start to recover a bit of share."
Slow car sales and high cash burn forced Fiat Auto to a worst-ever operating loss of 1.35 billion euros last year.