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AUTOSHOW-UPDATE 2-Fiat to beat 2010 target as future rosier

Published 09/30/2010, 10:05 AM

* CEO sees 2010 net profit in 2010 vs target for break-even

* Open to strategic deals for Fiat Industrial unit

* Focus on Chrysler integration before looking at car tie-up

* No plans to sell Alfa Romeo brand

* Shares rise 4.4 percent, outperform higher car sector (Recasts lead, adds details, shares)

By Danilo Masoni and Stefano Rebaudo

PARIS, Sept 30 (Reuters) - Italy's Fiat will close 2010 with a net profit, beating its break-even target, CEO Sergio Marchionne said, as the carmaker sees a brighter future after the industry crisis and prepares for possible tie-ups.

Even though sales in September did not go well in its home Italian market and in Europe, Fiat would very likely raise its 2010 targets, Marchionne said at the Paris Auto Show on Thursday.

"I've looked at the numbers and I think there is a very good chance we will (raise) targets," he told reporters. Asked whether Fiat will report a full-year net profit, Marchionne siad "yes".

"This is the first auto show that looks beyond the crisis. Carmakers' attitude has changed. We see a sligthly rosier future but it's too early to open champagne bottles," he said.

Shares in Fiat pushed higher after the comments. At 1353 GMT the stock was up 4.4 percent at 11.45 euros while the STOXX Europe 600 Autos index rose 1.9 percent.

Traders cited a positive situation for the group despite difficulties for the sector, as well as speculation about possible sector alliances after a spin-off of the auto and industrial businesses due to be completed this year.

Marchionne said Fiat's car sales in September "weren't very good in Italy and Europe but went well in Latin America".

TIE-UPS

Marchionne said the group would look at a possible tie-up with a third car player only after completing integration with U.S.-based Chrysler, of which Fiat has management control.

"We have a very challenging target which is the integration of Fiat and Chrysler. Let's bring that at home and then we'll look elsewhere," he said.

Fiat owns 20 percent of Chrysler and has options to raise its stake to 35 percent and then 51 percent.

The Italian group is splitting its autos and industrial businesses into two separate listed companies a move aimed at transforming the company into a global car player.

The break-up, effective in January, is seen as opening the way to an eventual merger between Fiat and Chrysler. The plan was approved by Fiat shareholders in September.

Marchionne also said the group was open to alliances to strengthen its Fiat Industrial unit, which controls Italian truckmaker Iveco and New York-listed agricultural machinery company CNH.

"We're open to any alliance that strengthens the business," he told reporters when asked about the possibility of a merger.

A report in the Italian press said in September Germany's Daimler was interested in its industrial arm..

Daimler CEO Dieter Zetsche said his company was not in talks with Fiat on the subject.

A sale of Fiat's Alfa Romeo brand -- on which Volkswagen's chairman has set his sights -- is not on the cards, Marchionne said, adding a bourse listing for the group's Ferrari unit was an option but there were no plans for this now.

He also said Fiat's stake in RCS MediaGroup, which publishes Italy's biggest selling daily, was "essential". (Editing by Michael Shields)

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