Fiat will suspend all production in Italy for two weeks from 22 February, laying off 30,000 workers, to match output to orders.

The decision follows a dramatic decline in January orders in Italy; reportedly below the level last January when the industry was in turmoil before government-backed scrappage schemes kicked in. The Italian government is due to meet on Friday to consider extending the EUR1,500 scrappage incentive that ended in December. Fiat CEO Sergio Marchionne has repeatedly urged Rome to extend the scheme and phase it out over two years.

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The launch of some new models might also be delayed until 2011 because Marchionne believes that launching them into a weak market would be a waste of time and resources, according to local media reports.

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