April 5 - Italian auto giant Fiat says its sales are expected to drop for the fifth successive year in 2012 to 13 million vehicles, as the group moves a step closer to a full-blown merger with U.S. automaker Chrysler. Joel Flynn reports.
Fiat has confirmed its sales in Europe are in decline for a fifth year in a row. Chief Executive Sergio Marchionne said stabilisation in new sales in the company's home continent might only begin to recover at the end of this year. The European car market is still struggling in the face of dampened consumer spending power and fears over high oil prices. But Fiat's salvation may come from across the Atlantic. The Italian car maker has been running Chrysler since a 2009 bailout deal backed by the U.S. government. It now has a 58.5 percent stake in the No. 3 U.S. automaker and is making moves to prepare for a full-blown merger by 2014. Ongoing strength of Fiat's U.S. and Latin American operations has underpinned the shift in attention away from the European markets. Chrysler Group reported a 34 percent increase in auto sales in March, the best monthly result in four years. Marchionne has been criticised for closing factories and suggesting the group could move its headquarters from Italy to Canada. But even as the groups other brands Alfa Romeo and Lancia both break even, Fiat's European business has a bumpy road ahead. Joel Flynn, Reuters