Could Fiat sell the whole of Ferrari?

Fiat continues to suffer from the problems related to its automobile business Fiat Auto and there is increased speculation that the Italian industrial giant may soon decide to sell its share in Ferrari. Most of the automobile executives around the world seem to think that a flotation or a sale of Ferrari is inevitable and with potential buyers such as Bernie Ecclestone on the market, Fiat might accept that it is better off getting the money and using it to bolster the whole group.

Fiat Auto boss Giancarlo Boschetti said in Paris that the main car company will have to make more cuts because it needs to cut its production. The company wants to reduce costs so that it can invest in new models. Fiat's unions say that they expect to see another 5,000 jobs going. The company has already shed 3,000 workers but still needs to lose more.

In the background there remains the possibility that General Motors will take over the remaining 80% of Fiat Auto which it does not own. The US giant has an option to by the stock which could be exercised in 2004. Boschetti said that there are no plans to bring that date forward.

And that means that raising cash in the short term will not be easy - hence the possibility of a complete Ferrari sale.

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