Fiat to temporarily suspend production at Italy plant

Auto giant Fiat will temporarily suspend production at one of its Italian plants between August 20 and 31 in response to slumping European car sales, the company said Wednesday.

"The situation requires us to reduce production to avoid a useless and costly accumulation of vehicles," said a statement from the group, which includes the Lancia, Alfa Romeo, Chrysler, Jeep and Dodge brands.

The affected plant in the southern city of Pomigliano will have two extra work weeks tacked on at the end of its normal summer break from July 23 to August 17, and "the situation will remain under observation for the coming months", the group said.

Fiat blamed the closure on "the crisis in the European and particularly the Italian automobile market", which it said had shrunk 6.3 percent and 19.7 percent respectively in the first half of the year.

The head of the company, Sergio Marchionne, had said earlier this month that Fiat would be forced to permanently close one of its Italian plants if the European market continued to slump.

The announcement on the Pomigliano plant came as workers at another factory in the southern city of Cassino were on strike to protest the possible closure.

New-car sales in Italy fell 24.4 percent in June from the same period last year, the ninth consecutive monthly drop, according to transport ministry figures.

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