Page last updated at 13:47 GMT, Wednesday, 21 April 2010 14:47 UK

Fiat and Chrysler report big losses

Fiat logo
Fiat took over Chrysler in June last year

Italian car maker Fiat has reported further losses despite the recent recovery in the car market.

The company said it made a loss of 25m euros (£21.7m; $33.4m) for the first quarter of the year.

Meanwhile its US subsidiary Chrysler lost a further $197m (£128m) - adding to the massive $3.8bn it lost following bankruptcy last year.

Fiat is due to outline a new five-year business plan later, outlining closer integration with Chrysler.

Despite the losses, Fiat said its sales - which include trucks and farming equipment alongside cars - were up nearly 15% on the same period last year.

Car sales alone saw a 22% increase, thanks in part to the continuing impact of Europe's car scrappage schemes.

But Fiat said it expected to be hit hard by the winding up of such schemes.

The end of the German scrappage scheme has already seen sales drop 73%, it said.

Fiat's chief executive Sergio Marchionne also sought to sound optimistic over the prospects for Chrysler despite the heavy losses.

He pointed out that Chrysler actually made a profit of $143m for the first quarter, if tax and one-off costs were disregarded.

The US-brand was also seeing increased revenues, he said.

Rivals profit

There was better news for rival European car firm Volkswagen, however, which reported profits of 473m euros for the first three months of 2010 - nearly double the profits recorded a year earlier.

VW said sales of its cars - which include the Seat and Audi brands - rose 19%.

Meanwhile French car maker Peugeot Citroen said its sales jumped 27.5% in the first quarter, and said it hoped to see a positive impact on profits.

But the company said it still expected the European car market to decline by 9% this year.

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