MILAN -- Italy's Fiat grabbed 30.9 percent of its home market in January, its biggest share since May 2002, but analysts said the sales gain had to be repeated in the rest of Europe to show Fiat is making a recovery.
The Turin-based carmaker tumbled into crisis two years ago as sales of its outdated cars slumped, but three new models launched in the last few months helped spur its Italian sales 6.1 percent higher year-on-year in January.
The overall Italian car market -- Europe's third largest -- rose 5.7 percent, government data showed on Wednesday.
"Obviously Fiat's new models are helping, and getting over the 30 percent level is important psychologically. But it's important to win market share in other big European markets -- that's the real test," said a Milan-based analyst.
A spokesman said early data showed that Fiat Auto, which includes the Lancia and Alfa Romeo marques, should grab 8.6 percent of the European market when official January figures are released on February 12, up from seven percent in December.
Fiat Auto is shaking up its European operations under new Chief Executive Herbert Demel but is fighting in tough conditions. The French car market is shrinking fast, and analysts say sales in Germany are being squeezed as Fiat closes some dealerships.
Fiat, which makes about 40 percent of its sales in Italy, said on Wednesday that just over half the orders for its small new Panda and mini-MPV Idea came from outside Italy.
Since the Panda was launched in September, it has taken 140,000 orders, while the Idea, which went on sale this month, has notched up 29,000 orders. About 55,000 of the new Lancia Ypsilons have been ordered, about 80 percent of them by Italians.
Fiat's best-seller Punto kept its strong place as Italy's favorite car in January, followed by the Panda and the Ypsilon, well ahead of the next-placed Citroen C3 and Renault Megane.
While Fiat battles back from all-time low market shares of around 27 percent last year, it still faces fierce competition. Mazda sales jumped 222.6 percent in January to one percent of the market, while Nissan rose 152 percent.
Volkswagen, which this week spooked investors with a special offer to boost Golf sales, fell 23.5 percent, pulling its market share down to five percent from 6.9 a year ago.
Industry body Anfia said total orders for new cars fell 10.4 percent in January against a strong month in 2003, when the government reintroduced incentives on eco-friendly models.
Anfia said car sales could weaken in February and March when measured against incentive-fed sales last year.
Research group CSP said dealers were positive about the future, even though consumer confidence fell to an all-time low in January, and that 75 percent expected demand to be stable or higher in the next months.
It added that so-called "zero kilometer" cars, registered by dealers and sold at a discount, accounted for 4.7 percent of January car sales, down from 6.1 percent a year-ago.