Fiat saw "clear signs" of improvement in the fourth quarter of 2003 thanks to sales of its new models, chief executive Giuseppe Morchio told Reuters on Tuesday.

"On an operating level, the fourth quarter has given clear signs of improvement both on a group level and on the level of Fiat Auto," Morchio reportedly said.

"We had always said 2003 would be difficult, a year which had to bear the burden of restructuring costs, but we have reason to believe that we are doing the right thing," he told the news agency.

Reuters noted that Morchio has frequently said the group would 'change gear' in the last three months of 2003, allowing it to speed to recovery this year - the group plans to hit operating break-even in 2004 while its troubled car making unit Fiat Auto is due to break even the following year.