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Fiat stops investments because of crisis in Europe

04 August 2012 09:09 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA. Fiat SpA (F) Chief Executive Officer Sergio Marchionne temporarily stopped new investments in Italy as Europeâ€™s debt crisis causes sales in the region to plunge, APA reports quoting â€œBloombergâ€.

â€œFor the time being, the economic crisis and current difficulties in the European auto market prevent the company from being able to give any indications concerning future investments,â€ the Italian carmaker said today in an e-mailed statement, adding that Fiat will give its new plan for Italian factories at the end of October, when it will releases third- quarter results.
Marchionne, who has been spearheading an industry-wide effort to cut excess assembly lines in Europe, has vowed to close a second Italian factory, after shuttering one last year, unless he finds a way to export cars to the U.S.
European auto sales are set to fall for a fifth straight year as high unemployment and the regionâ€™s sovereign debt crisis causes consumers to hold back from making big ticket purchases. Capital spending at Chrysler Group LLC, which Marchionne also runs, will rise to $4 billion this year from $3.1 billion in 2011, while Fiat is reducing European investment by 500 million euros in 2012.
â€œDifficult conditions persist in the European auto market, particularly in Italy where demand is approaching the lowest level since 1979,â€ Fiat said in the statement. â€œCertain peers who are still heavily exposed to the European market are experiencing significant losses and have even had to announce plant closures.â€