TURIN — Fiat SpA’s third-quarter earnings tumble a dramatic 49% compared with the same period a year ago. The world’s sixth largest automaker’s net income fell to E160 million (US$144 million) from E313 million (US$284 million) in like-2000.

Fiat Auto, Fiat’s car division, reported an operating loss of E120 million (US$108.4 million) during the quarter while Fiat’s farm vehicles unit, CNH Global NV, reported losses of E40 million (US$36.4 million). Overall sales for Fiat fell 0.5% during the quarter to E12.5 billion (US$11.3 billion).

For the year’s first nine months, however, Fiat says its overall sales for the group increased 1.6% to E43 billion (US$39.1 billion).

The alliance between Fiat and General Motors Corp. has helped to reduce Fiat’s cost structure by E160 million (US$145.6 million), in line with the previously announced E200 million (US$182.1 million) savings target outlined for this year, the company reports.

Fiat says it will accelerate plans to reduce costs even further throughout the year. The company hopes to reduce its cost structure by an additional 20% over previous goals in the next two years to maintain profitability going forward.

The company expects to miss its full-year profit target of E1.1 billion (US$1 billion) before tax, interest and depreciation expenses. While refusing to give details, Fiat says it expects fourth-quarter earnings to be negatively impacted by previously announced production cuts that are expected to idle 6,800 workers and reduce output by 100,000 units.

Fiat says most of the decline in the third quarter is due to falling consumer confidence around the globe in light of the terrorist attacks in the U.S. in September.

"The worsening of the international economy, which was already perceived as a potential risk before the terrorist attacks, is now accelerating, reflecting a sharp drop in consumer and business confidence," Fiat officials say. o