Fiat has no plans to exercise an option to sell its car unit to General Motors, CEO Giuseppe Morchio reiterated in a Friday newspaper, repeating Fiat should see a turnaround in the fourth quarter, Reuters reported.
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In an interview with Corriere della Sera newspaper, Morchio reportedly said Fiat’s third-quarter results, due out on October 31, would be “as expected, not brilliant”. The third quarter is normally weak for car makers as sales slip during the summer holidays, Reuters noted.
“We expect to see positive signs in the fourth quarter when sales of the new models will come through,” Morchio reportedly said.
Reuters said that Fiat is hoping a fleet of new cars [such as the new Panda] will revive sales and next week will launch its third mass market model in months.
The news agency said a slump in sales at Fiat Auto dragged the Italian industrial group into its worst-ever crisis last year, raising expectations that Fiat would take advantage of an option starting in 2004 to sell the unit to GM, which already owns 10%.
“The put option is a right we have but we have no intention of selling,” Morchio reportedly said, following a company line in place since new management arrived and sold profitable non-automotive assets to fund an industrial turnaround.
Reuters noted that Fiat Auto and GM have a string of money-saving joint ventures and have a deal to allow Fiat to sell its cars via GM’s Pontiac network in Mexico.
Asked if other such deals were in the pipeline, Morchio reportedly said: “I don’t rule it out but if you are talking about us going into the United States, it’s too early to make that decision. It is one of our goals but we’ll do it when the time is right”.
Reuters noted that, earlier this week, Fiat named Herbert Demel, the former head of Volkswagen’s Brazilian operations, as the new chief executive of Fiat Auto, taking over from Giancarlo Boschetti who will bring forward his retirement to November from next year.
“Demel is an expert in all areas in the sector. He will have to get the most out of the plan already in place at Fiat Auto, make attractive and reliable cars and look beyond 2006 from the moment he arrives,” Morchio reportedly said.
