Industry observers are expecting Europe's new vehicle sales to fall to lows not seen in decades, with Fiat and PSA/Peugeot-Citroën sitting in the lead car of the plummeting coaster. Both of those automakers traditionally count on the southern part of the continent for sales, yet consumers in that region have slowed spending due to the financial crisis.

Compounding the problem for Fiat is a lack of new product, as CEO Sergio Marchionne has stalled development to conserve cash during the downturn. PSA has invested in new vehicles, but aggressive price wars have forced it to sell its product with steep discounts. Making matters even more difficult, both companies may have their credit ratings cut this year. That would raise borrowing costs and only deepen the wounds.

The news isn't just bad for Fiat and PSA. Analysts are predicting that volume automakers in Europe lost 8 billion euros (about $10.68 billion in today's rates) overall in 2012, and they won't break even until mid-decade.

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    • 1 Second Ago
      • 2 Years Ago
      If Fiat in their infinite wisdom had brought Alfa here in 2008 when they said they would, they might be in a better position... or at least I would be, as I would have my 159 sportwagon in my driveway.
      • 2 Years Ago
      Fiat knows Italy is its second best market in the world after Brazil and things in Italy are not going well right now. Even with new products out of the pipeline, good returns on investments is hardly a possibility when consumers lack money. I think Peuget will fare worse than Fiat. Marchionne knows how to invest (or to not invest) when market conditions are (in)appropiate
      • 2 Years Ago
      Nothing surprising at all. Fiat and PSA were down before the economy slow down and its now just more highlighted with economy going down. VW and the Germany luxury brands along with Volvo are doing so well globally that even with Europe being their largest market they will do just fine.
      • 2 Years Ago
      Kiss if death when you tie-up with someone in Detriot.
        • 2 Years Ago
        Hey zoon-zoom, Does ignorance come easy for you, or did you have to take a class or something ?
        Gordon Chen
        • 2 Years Ago
        What fiat does in US selling US cars doesn't affect their European numbers. I mean the Fiat had the highest sales improvement in the US last month.
      • 2 Years Ago
      Fiat/Chrysler can do more platform sharing for future products. The 300 series should move up market and compete with other Premium full size cars. The 200 series can compete with other mid-sized Premium cars. The 100 series should not be a hatchback, but, a sedan to compete with compact Premium cars. Fiat has other platforms it can share with the Dodge Division.
      • 2 Years Ago
      Would this have anything to do with our Fiat currency system breaking I'm just stirring the pot ;)
      • 2 Years Ago
      Considering some of the things I've heard about late model PSA cars from one of the guys in my Facebook groups, I'm not surprised.
      • 2 Years Ago
      Let\'s face it, Autoblog always has something negative to say about Chrysler or Fiat. You do have positive stuff once in awhile but, most is negative. Sorry, wish I could say more but, it\'s dinner time. Bye!
      • 2 Years Ago
      Fiat has not impressed me. Some of the Jeeps that I have seen and driven lately have though, as well as the new 300 from Chrysler seem impressive on the outside and in pictures... That's my $.02 on them...
      Lab Rat
      • 2 Years Ago
      Chrysler Group is keeping Fiat afloat atm. Let's see how this turns out, 'cause I'm watching.
        • 2 Years Ago
        @Lab Rat
        And the Chrysler Group has FIAT to thank for rescuing it, and dramatically improving it's product. Chrysler can hold it's head up high with what it offers to today. But it's not just Chrysler's Product contributing to the company coffers, but the doors Chrysler open up in the America's and other regions.
      • 2 Years Ago
      This is only fractionally less obvious than the BMW/VW increase pick. PSA sells more cheap cars, cheap cars are taking a bigger hit as the effects of the financial bubble in Europe linger. FIAT is in the same boat, only they have a bit of a hedge with some of their more upscale cars of course including Ferrari.
        • 2 Years Ago
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