Struggling Fiat to float Ferrari

TROUBLED Italian carmaker Fiat has reported devastating losses but announced plans to float one of the world's most glamorous companies, Ferrari, by the end of the year.

Fiat suffered a first-quarter loss of e529m (£328m), from a profit of e193m a year earlier as sales fell 4% to e14.15bn.

The group, effectively controlled by 81-year-old patriarch Giovanni Agnelli, suffered weakening demand for its cars and Iveco trucks. In western Europe, car sales slumped 17%. Agnelli is in the US being treated for a prostate condition. His family owns 90% of Fiat, Italy's biggest industrial company.

Analysts expect the flotation to value Ferrari at anything up to e2bn. Fiat chairman Paolo Fresco said there were 'substantial' sell-offs ahead.