Italian carmaker Fiat may have to close two of its five plants in Italy in the face of weak European demand if plans to export to the U.S. market don't materialise, its Chief Executive Sergio Marchionne said in an interview on Friday.
Marchionne, who is also head of Fiat-owned U.S. car group Chrysler, said Chrysler factories in the U.S. were already working to full capacity, and plants in Mexico, Canada or Europe are needed to fill a third of the U.S. demand.
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Fiat's Italian sites therefore had the opportunity to export to the U.S., he said.
"All the plants will remain where they are... but if it (exporting to U.S.) were not to happen we would have to withdraw from two of the five operative sites," he told Italian daily Corriere della Sera.
Marchionne, who has made Fiat one of Europe's top turnaround stories, said car demand in Europe was set to remain weak for at least two years.
"The demand for cars in Europe is destined to remain low for quite a while to come. At least until 2014," he said.
Asked about the stake held by healthcare trust VEBA in Chrysler, Marchionne said it would not remain a shareholder for long.
"Either we buy those shares ... or we will find a way together to place them," he said.
Fiat has managed Chrysler since a 2009 bailout deal with the U.S. government and has a 58.5% stake in the group.
The remaining 41.5% ownership remains with VEBA, which is affiliated to the United Auto Workers union.
Asked about the future of Fiat-Chrysler, Marchionne said the options were three: an public offering of Chrysler shares, Fiat buying all of Chrysler shares or a merger of the two with a listing of Chrysler.
Asked which option was the most likely he said "the first is the least probable".
Marchionne, who ruled out a capital increase at Fiat, noted the group had liquidity to the tune of 20 billion euros.
"This liquidity is our (insurance) policy against a credit crunch; its cost is the insurance premium," he said.