MILAN - 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.
Fiat's recently appointed CEO, the latest in a series of CEOs to try his hand at turning around the carmaker, reiterated on Tuesday he was preparing a recovery blueprint after Fiat posted a record 4.3 billion euro ($4.87 billion) loss last year.
"It seems that Fiat is recovering," Giuseppe Morchio said on the sidelines of a conference after the automaker's share of its home market rose to 28.8 percent from 28.0 percent in March.
"We are trying to develop a relaunch in difficult circumstances," he said. "The situation is difficult: we need realism and a sense of perspective about the future."
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 end of tax incentives.
Year-over-year, however, 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 Morchio's pledge in an April 29 interview to invest new money into products rather than to cover operating losses.
CLOSER GM TIES
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 recapitalization of its car arm Fiat Auto.
Morchio said he planned to meet his counterparts at GM, which owns 20 percent of Fiat Auto, but no date was set.
The head of one of Fiat's main creditors, Banca Intesa, said on Tuesday he expected the Fiat-GM 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 Chief Executive Corrado Passera told reporters in Rome.
Overall Italian car sales slipped in April after the end of tax breaks aimed at getting consumers to trade in old cars.
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.
Italy's economy is struggling to grow 1 percent this year.
The tax break program, launched in July, has often been of greater benefit to rivals offering more up-to-date small cars.
PSA Peugeot Citroen's Citroen unit, for example, saw Italy market share more than double to 5.8 percent in April.
In the first four months of 2003, sales of new Fiat marque cars have fallen 12.6 percent compared with the year-ago period and Lancia is down 5.0 percent. Alfa Romeo is up 3.2 percent.