Fiat suffered a poor final month of the year in their key home market, claiming 26.6 percent of all new car registrations. However it was an unexpectedly strong month for sales, and Fiat saw their output rise year-on-year.

Fiat are highly reliant on Italian new car buyers who account for 40 percent of the auto division's worldwide sales. This slip last month sees them end the year with a market share of 28 percent. Although this figure is broadly the same with their 2003 performance, and Fiat can take much comfort from having stemmed a declining market share in recent years. It is however, below their forecast of around 30 percent, but in a year that saw a new Group CEO take over the reigns, and who immediately instigated widespread restructuring and personnel changes aimed at putting the century-old carmaker firmly back on its feet, it is a solid base from which an exciting recovery can constructively be built on.

Fiat did however outperform the Italian new car market, which rose and fell during the course of the last year. Fiat's sales over the whole 2004 was up by one percentage point, against an overall market performance that shifted higher by 0.5 percent. This performance can be put in better perspective by the fact last year government new car incentives heavily distorted the true picture, and so this year Fiat stood on its own merits. Also very satisfying to Fiat management was the fact that the higher-margin retail sales sector climbed sharply from 63 to 70 percent, as the carmaker looked to steer clear of the unprofitable discounting strategy employed by most of their rivals.

While Fiat very much struggled last month with their market share, Italian car sales in general were up during December, with 149,900 cars registered, up a pleasing 5.22 percent on December 2003 when 142,469 were registered. These strong new car registrations last month combined to give Italy a year total of 2.26 million new cars sold.

Although Fiat underperformed the market, they were also up year-on-year, by 2.4 percent. This was attributed partially to an extra two working days last month over the previous year (22 as opposed to 20 in December 2003) and a 30th November strike that cause a bottleneck of registrations that funneled backwards into December.

The result was actually the second best performance of all time, although it lagged along way behind December 2002, when a whole raft of government incentives saw new car sales rocket to 198,061, more than double the figures achieved in 2001.

Overall, the Italian new car market, which closed the year fractionally up on 2003, at 0.53 percent, had started 2004 brightly, with the first quarter registering and increase of 2.9 percent. This gain was given up during the second quarter, which shrunk by 2.5 percent, helped downwards by higher oil prices and a sluggish economic outlook, while the subsequent two quarters remained reasonably flat.

The stock markets reacted favourably to the results, with Fiat shares rising on the Milan bourse during the morning trading session. Deputy Industry Minister Adolfo Urso commented this afternoon that, "The car market figures for 2004 are encouraging, because they were obtained in a difficult situation, marked by the oil price rise, and with no state incentives. A result which rewards companies such as Fiat, which invested on new models, brands and marketing, that is, an efficient industrial policy." Urso concluded that, "We must pursue this policy, because 2005 will be a crucial year."

Star performers of the year for Fiat were the 'Car of the Year' award winning Panda and the new Lancia Ypsilon, while attention now turns to the next generation Fiat Punto, due to arrive this coming autumn, and what will be without doubt, the key new model introduction of 2005 for Fiat.