Italian car sales fell 5.7% year-on-year in July but Fiat fared better than some of its rivals and managed to grab 28.2% of the market, up from 26.6% in June, Reuters reported, citing official data.

Preliminary data from the Transport Ministry reportedly showed a total of 206,900 cars were sold in Italy last month - Fiat sales fell in line with the market, down 5.7% to 58,390 units, including its Lancia and Alfa Romeo marques.

Overall car sales had been expected to drop by about 5% in July, which had fewer working days than last year, Reuters said, noting that industry body Anfia said registrations fell 1.4% on an average sales per day basis.

Sector bodies reportedly warned that soaring oil prices, high insurance costs and uncertainty over when the troubled Italian government will introduce tax breaks could hold back sales in the rest of 2004 after orders fell almost 5% in July.

Industry group Unrae told Reuters that orders from car hire companies, often used by automakers to offload unsold stock, tailed off in July - Anfia said hire groups had accounted for 12.7% of Italian sales so far this year against 10.6% in 2003.

A breakdown of July's data showed sales of Fiat cars fell 4.2% in July 2003 but so far this year have climbed 4.1%, helped by the new Panda and mini-MPV Idea, Reuters said, adding that the Punto and the Panda took the top two spots in July's best-seller list.