UPDATE 1-Fiat Q1 as expected, sticks to 2008 targets-CEO


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By Gianni Montani

TURIN, Italy, March 31 (Reuters) - Italy's Fiat had a first quarter in line with expectations, Chief Executive Sergio Marchionne told shareholders on Monday, adding the car producer was sticking to its targets for the year.

"The first quarter was totally in line with expectations," he told the annual shareholders' meeting.

"All the targets fixed for 2008 are confirmed," he added.

Fiat, Europe's fifth-biggest car maker by market value, aims for a trading profit of up to 3.6 billion euros ($5.68 billion) this year. Marchionne said in January he would look at the targets at the end of the first quarter to see how market turmoil had affected his company.

Fiat shares were up 1.96 percent by 1117 GMT at 14.47 euros as the DJ Stoxx index of auto shares slipped 0.63 percent.

Marchionne said the targets were based on a view that financial market turmoil would have limited impact on the real economy, adding Fiat thought there was "little likelihood" of any major fall in consumer demand as a result.

But he said if that scenario emerged, "Fiat thinks it can fully sustain the financial impact ... even if it means a reduction in operating performance and margins."

New car registrations rose 8.7 percent in Europe in February, according to figures released by car industry association ACEA this month. Western Europe showed a 7.7 percent rise.

Although some manufacturers such as France's Peugeot were measured about prospects for the year at an auto show in Geneva at the start of this month, others such as Renault were more upbeat.

Marchionne said orders for Fiat's Cinquecento, relaunched with much fanfare last year, had already topped 182,000. Fiat's target for Cinquecento sales is between 140,000 and 190,000 this year.

The Bravo model has "easily exceeded the 2007 sales target and we can confirm the 2008 target of 120,000 units", he said.

Discussion of a potential separation of the car business from the parent company was "purely hypothetical", he said.

"I can guarantee that the group has not taken any initiative with anyone," he said.

Marchionne said this month Fiat would only spin off its auto division if the unit was permanently undervalued. (Additional reporting by Stefano Rebaudo; Writing by Jo Winterbottom; Editing by Quentin Bryar)



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