Fiat's loss-making unit in Ireland does not expect to break even in the booming Irish motor market until next year at the earliest, even though its Italian parent has ploughed more than €80 million into the business to offset the effect of a 70 per cent collapse in revenue since 2000.
The troubled manufacturer of the Punto and owner of the Alfa Romeo marque has not turned a profit in Ireland since 2000, and it revealed in accounts submitted to the Companies Office that its annual sales fell to €68.81 million in 2004, down from €229 million in 2000 and €90.34 million in 2004.
The accounts show that Fiat Auto (Ireland) Ltd cut its pretax losses to €4.9 million in 2004 from €27.35 million in 2003, but a spokesman said it lost money last year and was likely to lose more money in the current year.
"Losses continued in 2005, yes . . . Break-even is anticipated in 2007," the spokesman said.
He declined to quantify the losses in 2005 but said there was no capital contribution from the parent company in that period.
The latest accounts, for 2004, show that the parent made a capital contribution of €14 million that year.
Previous filings show capital contributions of €43 million in 2003 and €25 million in 2002.
The spokesman attributed the company's difficulties to the declining popularity of the original Punto model, which was introduced in 1999 and updated last year.
However, figures from the Society of the Irish Motor Industry (SIMI) show that sales of Fiat commercial vehicles and Alfa Romeo cars have fallen during a period of great difficulty for Fiat's car unit, whose Irish market share dropped to 1.44 per cent last year from 3.59 per cent in 2003.
The company is placing its faith in the new Grande Punto, its new Croma model and in new Alfa Romeo models.
Fiat's difficulties in Ireland mirror the troubles of its Turin-based parent, whose car division reported more than four years of quarterly losses before returning to a modest profit in the final three months of 2005.
The collapse in Fiat's Irish sales comes in the midst of a boom period for car business, which has been a major beneficiary of the rise in consumer spending and indebtedness.
Its demise is reflected in SIMI figures, which show that the 2,472 Fiats sold last year represented fewer than half the 5,218 sold in 2003.
Sales of Alfa Romeo cars fell in the same period to 783, 454 while sales of Fiat "light commercial" vehicles fell to 1,284 from 1,703.
The same data show that the market share of the Fiat car unit increased marginally in the first two months this year to 1.69 per cent, a period in which motorists bought more than twice as many BMWs than Fiats.
"The directors are confident, that the action taken to reduce losses, and ongoing support from group companies, will return the company to profitability," said a note with the 2004 accounts.
