Page last updated at 16:23 GMT, Thursday, 23 April 2009 17:23 UK

Carmakers see sales drop further

Fiat 500
Like most carmakers, Fiat has seen a big fall in sales

Italian carmaker Fiat has announced a loss of 410m euros ($535m; £368m) for the first quarter of this year, the first such loss in four years.

In the same three months last year, the carmaker, which owns the Alfa Romeo, Lancia and Ferrari brands, posted a profit of more than 400m euros.

Fiat boss Sergio Marchionne also reaffirmed his commitment to a partnership with US carmaker Chrysler.

Hyundai has also announced disappointing first quarter results.

Net profit fell by 43% to 225bn won ($167.4m; £115.1m) as sales plunged.

Toyota has also reported falling sales. The world's largest carmaker said it sold 27% fewer vehicles in the first three months of the year compared with the same period last year.

'Unwavering commitment'

Fiat is currently in talks with Chrysler about a partnership that could save the troubled US carmaker from bankruptcy.

Fiat will not be Chrysler's financial support vehicle
Sergio Marchionne, chief executive, Fiat Group

Mr Marchionne had hinted that his company might walk away from a deal if US and Canadian unions were not prepared to make greater concessions.

However, the Fiat boss spoke of his "unwavering commitment to Chrysler" at a press conference to discuss the carmaker's first quarter results.

But he did hint that he was not prepared to invest large sums of Fiat's money.

"Fiat will not be Chrysler's financial support vehicle," he said.

The US government has given Chrysler until the end April to negotiate a deal before deciding whether to provide further aid to the company.

Raising cash

A report on the website of German magazine Spiegel also suggested that Fiat was considering taking a stake in German carmaker Opel, part of General Motors Europe.

But when questioned about the possibility of such a deal, union leader and Opel board member Armin Schild said his members would be unhappy with any such agreement.

"We reject Fiat taking a stake in Opel," he said.

US parent company General Motors has also taken billions of dollars of US government aid as it fights bankruptcy.

It is looking to raise cash and has asked European governments to provide funds to help its European arm.

Falling sales

Carmakers across the world are struggling to cope with a slump in sales during the economic downturn.

"Demand in advanced markets is falling by [more than 10%] and even demand in emerging markets is dampening," Hyundai, South Korea's largest carmaker, said.

It added that the results would have been worse were it not for the weak won that made Hyundai cars cheaper to buy overseas.

The company did, however, report an increase in market share and provide some hope that sales could pick up in the coming months.

"From the second quarter, we expect global governments' economic stimulus measures and support plans for the auto industry to have some positive effect on the industry," said Chung Tae-hwan, Hyundai's chief financial officer.



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