12.05.2004 The first strong signs that Fiat have turned the corner have come with the news that the carmaker has more than halved its first quarter operating losses

The first signs that Fiat are getting firmly back on track have come with the news that they have more than halved their first quarter operating losses year on year.

As the restructuring and cost cutting programmes start to reap dividends, the industrial group as a whole reduced its first quarter operating loss to €158 million, down from €348 million during the opening three months of last year. The car division also reduced its operating loss to €192 million, well down from the previous year's €334 figure, as a raft of new models are starting to take grip.

The board meeting on Tuesday was missed by the Fiat Group Chairman, Umberto Agnelli, who is currently recovering from cancer treatment.

The recent strike at the ultra-modern Melfi plant caused a knock-on effect, halting production across Italy, and production of more than 35,000 cars was lost. The resulting operating loss, possibly up to around €80 million, will not come into play until the next quarter's results are announced.

However Fiat managers are confident that this loss can be made up during the final six months and that break-even is still an achievable target this year.

Apart from new models, including the Fiat Panda and Idea, and Lancia Ypsilon, being well received and boasting healthy order books, major savings are continuing to arise from the joint venture programmes being put into place with General Motors. Fiat CEO Guiseppe Morchio is confident that these will continue to factor strongly as the two companies explore further avenues to cut costs.