MILAN, July 21, 2010: Fiat announced on Wednesday a return to profit in the second quarter and won board approval for the Italian auto giant's plan to hive off non-car activities.
The group posted a net profit of 113 million euros (146 million dollars) in the second quarter compared with a loss of 179 million euros in the same period last year, it said in a statement.
The board of directors meanwhile approved a "demerger," first announced in April, that will take effect on January 1, 2011, Fiat said.
Shareholders are set to approve the operation at a September 16 general assembly.
The plan calls for truck maker Iveco, agricultural and construction machines manufacturer Case New Holland and a part of engine maker Fiat Powertrain Technologies to be part of a new group to be called Fiat Industrial.
The operation will leave a car-only Fiat with its own brand plus Ferrari, Lancia, Alfa Romeo, Maserati and its components and motor activities.
Fiat said the move would "provide strategic and financial clarity to both businesses and enable them to strategically develop independently of each other."
The change will also "allow for the proper valuation in the capital markets of these two businesses," the statement said.
For the time being, Fiat is maintaining its 2010 targets, but, citing improved demand, said it would "very likely" revise them upwards once third-quarter results are in.