Fiat CEO Sergio Marchionne warned that Europe's automobile market is in "severe contraction" on Tuesday and said he was pessimistic about the likelihood of it turning around soon.
The European automobile market "unfortunately is in a phase of severe contraction" that "reflects economic conditions - one will have to wait a long time for a trend reversal," Marchionne said on a visit to the new Fiat plant in Kragujevac, where he met with Serbia's new president, Tomislav Nikolic.
"I am still pessimistic about 2012-2013. We'll have to see in 2014," Marchionne added.
Fiat reported a slump in sales on the sluggish European market of 20% in August and July. Marchionne said in July that the carmaker may have to close one of its plants in Italy if weak demand on the European auto market continues.
Fiat temporary laid off workers at Pomigliano plant near Naples late last month because of weak demand and it is set to halt production there again from Sept. 24 to Oct. 5 for the same reason.