MILAN, June 24 (Reuters) - Loss-making Fiat Auto expects to improve its operating profitability in the second half of the year despite tough market conditions, its chief executive said on Monday.
In a statement, Chief Executive Giancarlo Boschetti said seasonal factors would depress new car sales more in the second half than in the first, dubbed "the blackest months for cars" in Italy, but that Fiat would still squeeze out better results.
"Despite quite difficult market conditions, Fiat Auto...will have, thanks to steps we have begun to take, a second half better than the first from the perspective of operating profitability," Boschetti said.
Shares in the Turin-based car maker pulled back from day lows on the news and by 1230 GMT were trading down 3.5 percent at 11.62 euros. Earlier in the day, Fiat stock plummeted to 11.36 euros, its lowest level in 9-1/2 years.
Fiat sharpened a six-day fall on Friday after group Chairman and Chief Executive Paolo Fresco said a weak Italian car market could slow by 15 percent this year after about a 12.7 percent drop in car sales in the first five months.
Fiat, which relies on Fiat Auto for about 40 percent of its revenue, sold about 39 percent of its cars in Italy last year.
Slowing car sales helped batter Fiat to a net loss of 529 million euros in the first quarter. It is now widely expected Fiat will sell off the auto unit to the world's biggest carmaker General Motors in 2004 when an option comes up to sell.
Until then, analysts have warned, Fiat's share price is likely to remain rocky.