Italian car maker Fiat has slashed its 2009 forecasts due to a slump in demand. It also said it would not pay shareholders a 2008 dividend. The announcement came two days after Fiat announced a tie-up with struggling US car maker Chrysler.
Fiat said it expected a tough 2009 with 'a particularly difficult first quarter'. The group is Italy's biggest private company, with 78,000 employees.
'The last three months of 2008 confirmed a significant deterioration in market conditions for most of our activities and in geographical regions where we operate,' Fiat said.
Fiat said that in 2009 it foresaw a 20% decline in worldwide demand for its vehicles and an operating profit 'above €1 billion', down from a previously forecast €4.3 billion to €4.5 billion.
The group last year recorded a 16.2% decline in net profits to €1.72 billion on 1.5% higher sales. Trading in Fiat shares was suspended on the Milan stock market for a time after the news.
Earlier this week Fiat said it had agreed to take a 35% stake in Chrysler in return for helping the US group develop small, fuel-efficient vehicles, while they would benefit from each other's distribution networks.
