Italian government Industry Minister Antonio Marzano has reportedly said that he has received assurances from Fiat Group that it is not planning to sell off its Fiat Auto car operations. The comments were reported by Reuters.
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Speculation has been rife that the industrial group will sell its financially troubled carmaking operations in order to raise cash and reduce its debts.
A report in the Italian weekly L’Espresso said last week that Italian investment bank Mediobanca had advised Fiat to sell its volume carmaking unit, Fiat Auto, to GM. Mediobanca recently purchased a 34% share in Ferrari.
Despite restructuring efforts undertaken at Fiat Auto, the division has been under pressure from weakening demand – especially in Italy – as well as intense competition. Analysts say that losses could top one billion euros this year.
GM currently has a 20% stake in Fiat Auto and under the terms of the GM-Fiat alliance, Fiat has an option to sell the remaining 80% to GM from 2004.
