Fiat is claiming that its falling market share in Italy is partly due to heavy speculation in Italy about imminent government incentives aimed at kick-starting the market (most likely through a scrappage incentive).

In a statement, Fiat claimed that potential buyers holding off from purchase had been particularly noticeable in the lower segments of the market during the month of June, especially the 'A' segment (typified by city cars like the Fiat Seicento) where Fiat has 70% market share.

Fiat said that sales in the A segment were down sharply as rumours of incentives hit sales 'especially in the second half of the month, when rumours about incentives became more persistent'.

The company also said that 'this decline had a negative impact of about one and a half percentage points on Fiat Auto's overall market share' in June.

Fiat's Group's market share in Italy in June was just 28.7% against 34.2% in the same month of last year and 31.1% in May.

New car sales in June declined by 17.2% over last year to stand at 180,300 units. It has been suggested that a scrapping incentive could be introduced to kick-start the market and help Fiat.

In 1997 a scrapping scheme in Italy kick-started the car market to 2.4 million units from 1.7 million units the year before.