Fiat's chief executive Giuseppe Morchio has said a three-week-long strike at the group's Melfi plant would hit results in the second quarter, but added that the carmaker hoped to recover lost production over 2004.

"Fiat Auto will have to recuperate production it lost during the Melfi strike, which will have a negative effect on the second quarter," Morchio told a shareholder meeting, according to Reuters, adding: "But we hope to get back that production in the rest of the year and maintain our group target of operating breakeven for 2004."

The news agency noted that Fiat and unions representing striking workers at the southern Italian factory last weekend agreed a deal to end the pay dispute.