The global credit crisis and international economic slowdown may force Fiat to postpone a planned buy-back operation of its shares, CEO Sergio Marchionne said here on Friday.
Speaking at the Paris Automobile Show, the Fiat executive observed that ''in a normal financial market Fiat would have bought back its shares at the speed of light, given their current value which is ridiculously low''.
''However, everything now must be put in the context of a global financial crisis. At times like these the utmost caution is necessary and even with cash we have on hand, we must focus conserving and protecting,'' Marchionne added.
The international credit crunch, brought on by the subprime loan crisis in the United States, has hit the automobile sector particularly hard because banks are hesitant to extend loans to buy new cars.
September was a poor month for Fiat on the Italian market, Marchionne admitted, but in Europe the Turin automaker ''did better than in September of last year. What is important is that we have increased our market share''.
''The Fiat group did well above all in France and Germany, while the Spanish market seems dead for everyone,'' he added.
Marchionne said it was still too early to say whether the economic downturn will force Fiat to revise its targets for 2009.
''I hope we won't have to downsize out goals for 2009. At present I can confirm them, they are not at risk, but we are going to have to wait and see what happens on international markets in the last quarter of 2008. We will need to assess the effect of this financial crisis and what its impact will be on the real economy,'' the Fiat CEO said.
''If this 'cold' turns into pneumonia then we're all going to be in trouble. In 2006 I said that even if the market shrank by 20% in terms of volume and in all sectors we would survive. At the time I thought this was a very unlikely scenario. Today I say that while it is possible, it remains improbable,'' Marchionne said.
