With the Italian government hinting this week that it might drop stimulus packages for the automotive sector Fiat Group CEO Sergio Marchionne has said in a statement today that he would "fully support" any decision to withdraw eco-incentives.

This represents a change of direction for Fiat which has previously called for the continuation of incentives for buying new vehicles, but said in its full year 2009 financial report last month that even if these subsidies are withdrawn the carmaker will be able to post a profit this year. Yesterday Italian Prime Minister Silvio Berlusconi said he was unsure where Fiat stood on the issue. In an interview he said the government was prepared to "to give a hand" with a continuation of the eco-incentives but added that "Fiat does not seem interested in having them."

The new stance on incentives comes as Fiat is locked into a battle with the national and local government and its unions over the future of the threatened Termini Imerese factory in Sicily, and follows on from a national strike on Wednesday at its domestic factories while a two-week Italy-wide shutdown is set for the end of this month.

"In relation to the eco-incentives, I want to emphasize that we would fully support any decision by the Italian government not to renew them," read a statement issued by Fiat Group in Turin and attributed to Marchionne. "In Italy, as in other European countries, such incentives stimulated demand during 2009, but they also had the effect of bringing forward purchases which consumers would, in any event, have made in subsequent years. Renewing those incentives would only serve to defer the underlying problem to a future date. As stated last week, when the Group communicated its official outlook for 2010, Fiat is capable of managing the situation from both a financial and industrial point of view, even under the most pessimistic scenario. But rather than a temporary stimulation of demand, what is needed now is a serious and committed industrial policy aimed at strengthening the competitiveness of the auto industry, a sector which governments worldwide consider vital to their economies."