MILAN, Italy -- Fiat shares rose as much as 5 percent on Tuesday on hopes about its recovery plan and closer ties with General Motors, as new figures showed it had won a greater share in Itay's sliding car market.
Total Italian new car sales were 182,800 during April, a fall of 5.8 percent from the same month last year, the Transport Ministry said. Sales were hit by the expiry of tax incentives.
Fiat's share of its home market was 28.8 percent, compared with 28.0 percent in March.
But year-on-year, group sales, which include the Lancia and Alfa Romeo marques, fell 12.6 percent to 52,660 units.
Fiat shares are up 14 percent since April 28, outperforming the sector, which has gained just 1.4 percent in the period, helped by Fiat CEO Giuseppe Morchio's pledge in an April 29 interview to put any new money into investment and innovation rather than to cover operating losses.
"I wouldn't read these numbers, which contain no surprises, as a reason for the rebound," said one Milan-based analyst. "People are starting to bet on what Morchio will present in his plan in June."
Morchio, the latest of a series of CEOs to try his hand at turning around the carmaker, is preparing a recovery blueprint after Fiat posted a record 4.3-billion-euro ($4.87 billion) net loss last year.
Investors also may be betting on help for Fiat from industrial partner GM, which has so far been hesitant to contribute fresh cash. The Italian automaker has begun a five-billion-euro recapitalisation of its car arm Fiat Auto.
GM DEAL SEEN STRENGTHENING
Fiat's top managers are reportedly planning to meet their counterparts at GM, which owns 20 percent of Fiat Auto, in mid-May. The head of one of Fiat's main creditors, Banca Intesa, said on Tuesday he expected their relationship, which includes extensive industrial cooperation, to deepen.
"Certainly there will be more time needed to carry out the integration which is already in the logic of their existing agreement and which I think will be accelerated and deepened even further in the next few months," Intesa CEO Corrado Passera told reporters in Rome.
Fiat could be still be suffering the effects of a flood at a plant in Italy that cut output in February and March, the analyst said, adding the prospect for further share price gains would depend on reception for new car models due later in 2003.
Overall Italian car sales slipped in April after the expiry of tax breaks aimed at getting consumers to trade in old cars for cleaner-burning models.
Industry research group Promotor warned things would get worse. "The size of the slowdown under way in the Italian car market will become fully clear in the coming months," it said in a statement after the numbers were released.
Italy's economy is struggling to grow one percent this year.
The tax break program, launched in July, was seen as an attempt to help Fiat although the discounts were often of greater benefit to rivals offering more up-to-date small cars.
PSA Peugeot Citroen's Citroen unit, for example, saw its market share in Italy more than double to 5.8 percent in April, helped by new models.
In the first four months of 2003, sales of new Fiat marque cars have fallen 12.6 percent compared with the January-April period of last year and Lancia is down five percent. Alfa Romeo by contrast is up 3.2 percent.