Fiat raises auto division's 2006 profit target

Turin: Italian industrial group Fiat raised the 2006 operating profit target for its Fiat Auto division to 275 million euros ($351.3 million) from 250 million euros on Thursday.

"We are making money," Chief Executive Sergio Marchionne said in slides prepared for an investor presentation at the group's headquarters in Turin in north-west Italy.

The division aims to launch 23 new models by 2010 as it fuels profitable growth.

Since a major restructuring overseen by Marchionne and the launch of new models like the Grande Punto, the division has had some of the strongest sales growth among European auto manufacturers this year.

Fiat Auto expects car sales at its core Fiat brand to advance to 2.4 million units a year by 2010 from 1.5 million in 2006, the slides showed.

Part of that rise would come from entering new markets such as Australia and Mexico.

Fiat Auto's other two brands are also raising their volume targets as they expand into foreign markets.

Antonio Baravalle, head of Alfa Romeo, told investors at the presentation he would bring the premium sports brand to the US market in the third quarter of 2009 with the aim of having 20,000 unit sales in that market by 2010.

Models to be sold in the United States include the Alfa 169 and Alfa 159, he said.

Baravalle said his 2010 target was for a total of 300,000 unit sales against an expected 160,000 this year.

The 2010 total sales unit figure is the same as the premium brand Lancia, which is expected to sell 120,000 units in 2006.

Investors are playing close attention to Fiat's automotive business Fiat Auto.

Although it has recovered market share, posted strong sales growth and turned a profit, the auto division is still seen by some analysts to be in a precarious state.

Despite the success of models such as the Panda city car and the Grande Punto hatchback, Fiat Auto is barely breaking even in the competitive western European market. Most of its profits still come from Brazil, where it has a strong presence.