Fiat's share price has climbed above the 6 euro mark today amid persistent rumours of a major Italian government initiated new car purchase scheme, further assets disposals, or even the complete spinning-off of the Auto Division.

Ordinary shares in the Fiat Group rose 2.54 pct to 6.07 euros this morning as the Italian carmaker's stock continued to attract the attention of speculators feeding on the myriad of rumours that surround it. This latest rise, which has seen the share price break through the psychological 6 euro barrier, is a welcome turnaround after the price plunged as low as 4.39 euros just a few weeks ago amid continuing uncertainties over the intentions of the consortium of banks who are due to convert a 3 billion loan in September.

Speculation now centres around further asset disposals that could be made as Fiat continue to focus all their attention on providing a healthy future for the Auto Division. This is expected to see more 'non-core' assets sold, and even a possibility that the Auto Division could be spun-off from the main group's operations. However, the main focus of speculator's attention is strong hints of an impending proposal by the Italian government to push old cars off the road by offering a fresh incentives to car buyers to swap to new low-polluting new cars. The scheme's targets are described as 'major', with plans being put in place to remove around 16 million cars that fail to meet EU emissions legislation off the road by 2010-2012. This figure equates to around nearly half of all cars currently running on the Italian roads.
 

Under the plans the government could slash new car VAT by up to 70 percent from September, which would breathe serious life into the new car market, which has been flagging somewhat over the last few months.

With the new Fiat Punto due to arrive in September, and Fiat possessing the highly efficient and technology laden 1.3 Multijet 16v compact diesel engine in its armoury, they stand poised to reap major benefits from this plan.

IVECO-BARCLAYS AGREEMENT FINALISED

Meanwhile, Fiat has confirmed that the agreement to sell 51 pct of the Iveco truck-to-buses division's finance arm has now met regulatory approval and has gone ahead.

"After receiving all necessary approvals from the relevant regulatory authorities, Iveco and Barclays have today closed the agreement for the sale to Barclays of 51% of Iveco Finance Holdings Ltd for an amount of 119 million Euro," said a statement issued on Wednesday in Turin by Fiat. "Iveco will retain a 49% stake in Iveco Finance Holdings, Ltd. Following the agreement Fiat has received reimbursement of intra-company financing in excess of 2 billion Euro, further strengthening the Group’s liquidity," it concluded.