Italy new car sales seen down 13 pct in June

MILAN, June 26 Reuters reported that new car sales in Italy -- the key home market of loss-making automaker Fiat-- are likely to show a 13 percent fall in June, the chairman of auto industry group UNRAE said on Wednesday. "End-of-month projections show a fall in line with the average for the last five months, so something around 13 percent to about 190,000 vehicles," Salvatore Pistola, head of the National Union of Foreign Automotive Representatives (UNRAE) told Reuters.

He said the estimate could yet be revised depending on how sales went in the final few days of the month.

Fiat has a roughly 30 percent share of the Italian market which accounts for around 60 percent of its European sales.

In May, new car sales fell 11 percent on an annual basis to 209,100 vehicles. In June last year, sales rose 10.29 percent to 219,200 cars on the same basis.

The slump in sales in Italy, as well as Fiat's market share, has complicated efforts by the industrial group to tackle widening losses and mounting debts.

Moody's Investor Service on Wednesday cut its long-term debt rating on the carmaker and industrial group to one notch above "junk", citing concern about the outlook for Fiat's vehicle businesses.

Last week, Fiat Chairman Paolo Fresco said the group expected Italian car sales to fall 15 percent in 2002 with the second half worse than the first six months.

"Weighing on June's figures have been expectations for incentives in the auto market which have pushed consumers to delay purchases," Pistola said.

Italy's government has said it is considering measures to boost sales of environmentally friendly cars and on Tuesday a Senate commmittee approved part of a law which would free up 15 million euros over three years in incentives for gas and electric-powered cars.

Separately, the head of research group Centro Studi Promotor, Gian Primo Quagliano, said he expected a "double-digit" fall in sales in June.