Fiat sharply narrowed its operating loss in the first quarter of the year thanks to a restructuring plan aimed at turning around the struggling Italian conglomerate.

First quarter results also confirm the group should be able to achieve operating break-even, as planned, by the end of 2004, Fiat reported.

The company’s carmaking division, Fiat Auto, nearly halved its operating loss to €192 million in the first quarter compared to €334 million last year.

Fiat Auto’s sales rose to 5.265 billion euros from 4.928 billion, thanks to four new car launches since September including the ‘European Car of the Year’ Panda and the Lancia Ypsilon.

Worldwide vehicle sales in Q1 totalled 472,500 units, 12.7% ahead of the same period last year, with market share reported by Fiat as steady in Europe but up in Italy.

Fiat said its first-quarter results and “initiatives planned for the months ahead,” confirmed the group should be able to hit its target of breaking even on an operating basis this year.

“They are not out of the woods yet, especially when you consider it within the operating level,” said Adam Jonas, a car analyst with Morgan Stanley, in remarks carried by Reuters.

Jonas added that net debt – which was 4.4 billion euros against 3.0 billion at the end of December – was bigger than expected, Reuters said.