Fiat falls victim to adverse market conditions
The Italian car maker is unable to sustain onslaught of the worsening global economy and difficult market conditions. To shield itself from bigger damage, Fiat proposes to raise prices of cars and agricultural machinery. Chief executive, Sergio Marchionne while addressing a conference hosted by Aspen Institute in Rome declared that Fiat will pass on all the price hikes of raw materials to the consumers.
Sergio thanked God for not being the biggest car maker. He justified the need for price hike by displaying price graphs of steel, aluminium, plastic, glass and other materials. Apart from the price hike, Fiat is also planning stringent measures like slashing of production in Western Europe and temporary lay off of some workers.
Fiat shares took a 4 per cent plunge but recovered next day after Sergio clarified that Fiat will stick to its original targets till 2010. Sergio disagreed with analysts’ forecasts that oil price will come down to $80 a barrel level and other commodities will also follow a down trend.
However, Fiat’s agricultural machinery division appears unaffected by the economy slump. The producer of world’s largest tractors has 12 months of orders in its bag. Sergio criticised Federal Reserve and European Central Bank for their disjointed approach and warned that it will create havoc in currency markets and may drag Europe into a recession.
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