Italian car maker Fiat reported a hefty first-quarter loss and said it would sell shares in sports car unit Ferrari on the stock market to tackle rising debts.
The group posted a first-quarter net loss of €529 million, compared with a € 193 million profit a year earlier.
Fiat said it hoped to break even at the operating profit level in 2002, although it did not see a substantial reversal in the first-quarter trends of its main markets. Analysts said they needed more explanation of the outlook.
Fiat shares, which have underperformed the Dow Jones index of European auto stocks by nearly 35 per cent since the start of the year, were up about 1.2 per cent shortly after the results, slightly outperforming a flat sector.
Fiat hopes to raise around € 1 billion via a listing of Ferrari and a capital increase at tractor and earth-moving arm CNH Global.
But Fiat's troubled car unit, suffering from a shrinking share of sagging car markets, especially in Italy, was at the root of the group's problems.
Fiat said the difficulties in the auto division had been due to aggressive pricing competition, weak markets in Brazil, Turkey, Argentina and Poland and a deteriorating product mix.
Its new Stilo car, which the company had hoped would revive its flagging sales, has been a disappointment so far, with some analysts describing it as a flop.