30.10.2003 FIAT AND GENERAL MOTORS SHIFT BACK THE CONTROVERSIAL 'PUT' OPTION UNTIL 2005

Fiat and General Motors have agreed to shift back the opening exercise date of the controversial 'put' option from next January to the beginning of 2005. The 'put' option, inserted when Fiat sold GM a 20% in the Italian Industrial giant three years ago, allows them to force the American carmaker to buy the remaining 80% during a five year window which was due to open on 24th January.

This allows the two company's time to further discuss the option, which GM are adamant has been invalidated by the recent spate of Fiat asset sales, but which Fiat's creditor banks are also adamant remains a lifeline for them to recover their investment.

Immediately, Fiat Chairman Umberto Agnelli, commented that Fiat would be looking to negociate financial compensation with GM if the 'put' option was to be cancelled completely. Financial analysts were pleased generally with the decision to delay, which will allow Fiat to push further along with their recovery plan and ideally place them in a better position in any future buy-out or merger.

Meanwhile, Fiat's asset sales continue, with sources stating that talks have started with Italian construction group Fabrizio Di Amato to sell the profitable engineering and building contracting division.
TURIN: STATEMENT BY GUISEPPE MORCHIO, CHIEF EXECUTIVE OFFICER, FIAT SPA

The agreements signed today by Fiat and General Motors are very important since they address a subject, the put option, which has recently received great attention by the financial community and the media. At the same time, they pave the way for an in-depth analysis of the development of the strategic alliance between the two Groups.

The relationships between the two Groups became clearer after the position recently undertaken by General Motors: GM has in fact expressed doubts concerning the possibility for Fiat to exercise the put, while we regard this option as absolutely effective.

The agreements reaffirm the strong willingness of the two partners to continue to develop their current industrial ventures and search new cooperation opportunities.

Concurrently with the industrial operations, the Groups will enter discussions to start a review process of the Master Agreement with no prejudice to the interests of the partners and their stockholders.

We have one year ahead of us to redefine the agreements with GM. This will enable Fiat to bring forward the Relaunch Plan with firm determination and without uncertainty as for the relationship with our partner.

Today's agreements are part of the strategic path we took to implement our Relaunch Plan, whose major steps include: a focus on the automotive sectors; the divestiture of non-core operations which have secured, together with the capital increase, the necessary financial resources; the strengthening of the Group's and Operating Sectors' management structure and a faster pace in the introduction of new products which are being extremely well received.

TURIN/DETROIT: JOINT STATEMENT GM - FIAT

 Fiat S.p.A. and General Motors Corp. announced today certain agreements relating to their ongoing strategic alliance.

The first agreement shifts the put period by one year, from January 24, 2004 to July 24, 2009 of the Master Agreement, to January 24, 2005 to July 24, 2010. The second agreement precludes the parties from initiating legal proceedings relating to the Master Agreement until December 15, 2004, while preserving their respective rights.

General Motors and Fiat continue to believe that the joint ventures between Fiat Auto and General Motors are working well, generating synergies, and that both parties would like to see expanded cooperation.

General Motors has alleged that the sale of certain assets of the financing business of Fiat Auto and the capital increase of Fiat Auto Holdings, carried out by Fiat, constitute breaches of the Master Agreement entitling General Motors to terminate the Master Agreement and with it the put option.

Fiat contends that both of these transactions were wholly proper and did not violate the Master Agreement or any of General Motors’ rights. Fiat regards the put option as effective and exercisable in accordance with the provisions of the Master Agreement.

The Amendment and the Standstill Agreements have been executed in the context of ongoing discussions between Fiat and General Motors regarding the re-defining of the structure of the strategic alliance in order to permit their industrial cooperation to continue constructively and resolve both parties’ concerns.