Fiat SpA (F) was downgraded by Moody’s Investors Service by one step with a negative outlook on concern the combination with Chrysler Group LLC will leave the Italian carmaker responsible for the American automaker’s debt.Fiat was lowered to Ba2, two notches below investment grade, from Ba1 because the integration of the carmakers “could result in the two companies having to support each other in the event of financial difficulty,” Moody’s said today. Debt of about 8.3 billion euros ($11.3 billion) is affected by the downgrade, the rating company said. Fiat declined to comment.Moody’s also cited Fiat’s business risks, including its “relatively infrequent model renewal rate, which is constraining the group’s competitive position” in Europe, and increased competition from rivals in Brazil.Chief Executive Officer Sergio Marchionne, who runs both Fiat and Chrysler, is struggling to boost European sales as Fiat posts losses in its biggest market and continues to lose ground to competitors. Fiat’s European market share through August shrank to 7.3 percent from 8.2 percent a year earlier as deliveries plunged 13 percent, according to statistics from the European Automobile Manufacturers’ Association.Fiat fell as much as 19 cents, or 4.5 percent, to 4.12 euros and was trading down 4.1 percent at 4.13 euros as of 3:45 p.m in Milan, giving the company a market capitalization of 5 billion euros. The shares have lost 38 percent this year, compared with a decline of 25 percent in the Bloomberg European Auto Manufacturers Index.Marchionne said earlier this week that the group “has enough liquidity to weather the storm.” The CEO said in June that the Italian carmaker won’t risk a credit-rating downgrade to gain full ownership of the American carmaker. Chrysler is rated by Moody’s three steps lower than Fiat.“Markets are worried again about liquidity,” Philippe Houchois, a London-based UBS AG automotive analyst, wrote in a note to clients before the downgrade. Houchois, who has a buy recommendation on the stock, today cut his target price to 7 euros from 8.50 euros.Fiat, including Chrysler, expects to have as much as 5.5 billion euros of net industrial debt at the end of the year and about 18 billion euros of cash. Group debt was 3.4 billion euros at the end June, of which 979 million euros was for Fiat, according to a July 26 presentation posted on its website. The Italian carmaker began consolidating Chrysler’s results in June.“Moody’s considers Fiat’s liquidity profile to be good, excluding Chrysler and the unknown amount of cash outflow that would be involved if Fiat were to exercise its option” to buy the remaining stake owned by United Auto Workers union’s retiree health-care trust.Fiat aims to recover market share in the second half with new models such as the Freemont, a European version of the Dodge Journey, and the subcompact Lancia Y and Fiat Panda, which was shown last week at the Frankfurt Motor Show.The Italian carmaker may delay the market entry of new products because of the crisis, Marchionne said last week. Fiat postponed some Alfa Romeo models, including a sport-utility vehicle, by one year to 2013, delaying the brand’s return to North America. Alfa abandoned the U.S. in 1995.Marchionne said yesterday that Italy’s austerity measures will impact car sales in the country this year and next. Fiat targets “ultimate” break-even in Europe in 2014, he said.Marchionne, 59, last week ruled out any share sale for the time being for Chrysler or luxury brand Ferrari because of the market uncertainty. There’s no “urgency” to merge Fiat and Chrysler, Marchionne said. Fiat owns 53.5 percent of the American automaker and expects to get 58.5 percent by the end of the year.Fiat was placed under review for a possible downgrade by Moody’s and Fitch Ratings in April after the carmaker announced plans to raise its Chrysler stake. Standard & Poor’s lowered its long-term corporate credit rating on the carmaker to BB in February and confirmed its “negative outlook.” All of Fiat’s ratings are below investment grade.