After a difficult week's trading, Fiat's share price showed signs of recovery today, climbing by more than 5 pct, with the markets in particular impressed by CEO Sergio Marchionne's decision to purchase 220,000 shares in the Italian carmaker.

The week had started on Monday with a more than 10 percent tumble in the Fiat Group's share price, the downward trend not helped by the stockmarkets continuing jitters over the automotive sector in general, and huge losses announced by General Motors, in particular. In fact, trading was suspended for a short period while Fiat issued a statement rebutting the market's fears that the Italian carmaker would be unable to meet a September deadline to repay a 3 billion euro convertible loan.

Yesterday saw the Group's share price slide to further historic lows, closing at 4.533 euros, down 4.83 percent, having been as low as 4.39 euros during the day.

However a late afternoon decision by Fiat Group CEO Sergio Marchionne to invest in 220,000 shares, impressed the markets, which rewarded the decision by pushing the share price back up by more than 5 percent in early morning trading today. "Marchionne's action speaks of senior management's faith in the company as a whole, at least in the short term," said one automotive sector analyst today.

MONTEZEMOLO: "Agreement concerning the September deadline for loan conversion is fully on track"

Fiat Chairman Luca di Montezemolo meanwhile weighed into the debate on Fiat's future earlier this week during a lecture he gave to the students of Perugia University on the occasion of the institution's 79th anniversary, an event he attended in his dual role as Chairman of Confindustria, the Italian trade body.
 

Tackled by journalists as he arrived at Gallenda Palace, the university's famous home, Montezemolo commented, "the relations with the banks is excellent and I do not need to add anything to what Sergio Marchionne said last night, and acting as a governance that will increase the number of employed consultants to three or four and the representation of minority shareholders. The meeting will now take place in the second half of June."

"The agreement concerning the September deadline for loan conversion is still fully on track", Montezemolo later told an audience of the university's resident foreign students, "performance is encouraging in all sectors of our operation, barring none and with regards to the auto industry, the new Fiat Croma is out shortly, to be followed by two new Alfa models at start of summer and later in September the new "Punto" will be out. There's great activity with regards to the auto sector.

"Debt conversion is still on track despite the general downturn in the auto sector. Fiat is concentrating on cleaning up its various markets, with a view to sapping excess production," he concluded.

New Fiat Croma: 35,000 units to break even

Fiat have revealed this week that the new Croma model, which is imminently due in the showrooms, needs only to achieve sales of just 35,000 units per year to break-even, although Fiat are 'conservatively' targeting shifting 50,000 units of this new model a year.

First publicly presented during the Geneva Salon at the beginning of March, the Giorgetto Giugiaro-designed Croma is a stylish and individual evolution of the 'station wagon' theme. Characterised in particular for its roomy and comfortable interior, technological innovation, particularly with its diesel engine line-up, and boasting superior build quality, it is expected to be a strong market player when it arrives this summer.