MILAN -- Fiat ended 2004 on a glum note, with its share of a flat Italian car market slipping to a historic low even after it launched new models to turn around a slump in sales.
Fiat took 26.6 percent of its home market in December, far below its all-time high of about 60 percent and still well short of its 2007 target of 30.5 percent.
In all of 2004, Fiat took 28 percent of Italian sales, flat on 2003, official data showed on Wednesday.
Fiat Auto relies on Italy for about 40 percent of its turnover and had hoped that new launches like the Fiat Panda and Lancia Ypsilon would win back buyers and pull it out of crisis.
But a combination of general stagnation in Europe, where many car markets were salvaged only by a strong December, flaccid Italian consumer demand, rising raw material costs and fierce competition pushed another spoke in Fiat's wheels.
Fiat outperformed the Italian market last year but sales ticked up just 1 percent against an overall market rise of 0.5 percent. In December, Fiat sales rose 2.4 percent year on year against an overall sales increase of 5.2 percent.
This year looks no better, with industry bodies expecting Italian sales to fall 6.6 percent and auto firms seen offering more payment deals and giveaways to push cars off the forecourt.
Fiat faces its own challenges in 2005, from settling a spat with partner General Motors to negotiating the closing of a bank loan and launching its new Punto and an estate car.
The new Punto is due out in the autumn and will replace Fiat's best seller, which accounts for about 30 percent of its sales. A flop would sound serious alarm bells for Fiat Auto, which hopes to return to operating profit in 2006.
Fiat said it was now pulling more profit out of its sales with 70 percent of cars going to individual buyers in 2004, up from 63 percent in 2003. Private car sales bring fatter profit margins than sales to rental firms, dealers and fleet managers.
Italian auto body Anfia said carmakers had boosted volumes with less-profitable sales and that orders placed with dealers were in fact down 1.4 percent in December and 2.2 percent for the year. Fellow body Promotor said 59 percent of dealers felt orders were low in December, up from 56 percent in November.
December sales were boosted by having two extra working days in comparison with last year, without which the month's sales would have been slightly lower year on year, Promotor said.
In December, Italians registered 149,900 cars for a full year total of 2.26 million units.
Hyundai and its Kia unit were the best performers in December, with Kia sales up 215.5 percent to take 2.4 percent of the market. Over the whole year, Mazda was the winner with sales up 72 percent.
Volkswagen's Spanish unit Seat lost the most, down 18 percent in 2004.