Fiat to lay off 105,000 as Italian sales dive

FIAT, the troubled Italian car giant, will temporarily lay off 105,000 workers next month and cut vehicle production by 40,000 cars and vans because of the alarming slide in its domestic and European markets, writes Michael Harrison.

The latest cuts mean that Fiat's car production will end the year about 100,000 down, largely due to the collapse of the Italian market, which last year accounted for half Fiat's output. Italian car sales were down by 14 per cent last month and 22 per cent in the first nine months of the year.

In the first six months of this year Fiat Auto reported a loss of dollars 600m and sold 90,000 fewer cars in Italy, despite increasing its share of the domestic market to 45 per cent.

Fiat began short-time working early in 1992 and has since had to make increasingly deep production cuts in response to the worsening downturn. Car output was reduced by 49,200 in September and will end this month 24,300 lower than planned.

A Fiat spokesman added that it did not expect demand to pick up until next autumn.

Although Fiat will post a 'big loss' for 1993, the company is banking on an pounds 18.5bn model renewal programme to pull it through. In addition to the Punto, the replacement for the Uno, Fiat plans to launch a new coupe next year, new versions of the Alfa 33 and Alfa Romeo Spyder and Coupe and a people carrier.