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Published: Thursday, 4/16/2009

Chrysler suitor Fiat bucks trends, sees sales rise


MILAN The Italian automaker Fiat, which is seeking an alliance with troubled U.S. Chrysler LLC, outsold the competition last month in a contracting European market, on Thursday reporting a 14.7 percent increase in March sales amid an overall drop in European car sales of 9 percent.

Fiat was the only European automaker to see sales grow and its market share rose to 9.2 percent, from 7.4 percent in March 2008.

The Italian automaker is in talks to take a minority share of Chrysler in a deal aimed at saving the U.S. automaker from insolvency. But Fiat Group CEO Sergio Marchionne has said the deal, which must be reached by April 30, could fail if U.S. and Canadian unions aren't willing to make concessions that would cut costs. Talks between the Canadian Auto Workers and Chrysler are set to resume on Monday after a two-week hiatus.

Fiat said its sales more grew more than 200 percent in Germany, where the market was up 40 percent thanks to a government incentive program giving car owners $2,500 to trade in older cars for new models. The program is believed to especially benefit makers of small cars like Fiat as consumers turn to models that are less expensive to buy and operate.

Fiat grew three times the market rate in France for a 25 percent increase in volumes. Italian car sales were flat, despite a government incentive program.

"The trend is on the rise for all brands," Fiat said in a statement. Fiat produces cars under the Fiat, Lancia and Alfa Romeo brands.

Marchionne has driven a turnaround at the once-failing Italian automaker, shedding noncore businesses, trimming management, signing more than 30 strategic industrial alliances to share costs and enter new markets, and launching a series of successful new models, including the hot-selling update of the iconic 500, or Cinquecento in Italian. He would like to launch that car in the United States under the Fiat brand, along with reintroducing Alfa Romeo.

Marchionne said in an interview published this week that he was willing to do whatever it takes to revive Chrysler, including taking the job of CEO.

"Fundamentally, that's possible, but the title isn't important," Marchionne said in an interview published Wednesday in the Toronto Globe and Mail. "What's important is that they hear me. It's possible that I will have to divide my time between running Fiat and running Chrysler."

Marchionne said some of Chrysler's 30 plants would be closed, but would not say which ones would be targeted. Chrysler's headquarters in Auburn Hills, Mich., would be thinned out.

"Fiat has an incredibly flat management structure," Marchionne said. "Chrysler needs a flat management structure."

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