MILAN, Sept 18: Fiat’s boss painted a bleak picture of the Italian auto market but said the historic brand will stay in the country, amid union warnings that Italy’s top private sector employer is set to shed jobs.

Sergio Marchionne, who also heads up US auto giant Chrysler, was responding to a furore in Italy after Fiat last week said it would not stick to its previous investment targets and would unveil a new strategic plan next month.

“Fiat has accumulated losses of 700 million euros ($916 million) in Europe and is supporting these losses thanks to success in the United States and emerging markets,” Marchionne told La Repubblica daily on Tuesday.

Of the 3.5 billion euros in operating profit Fiat expects this year, none of it will come from Italy, where there has been a collapse in sales, he said. Asked if he saw any light at the end of the tunnel, Marchionne responded: “I don't see anything until 2014. That's why investing in 2012 would be lethal.”

Italian Prime Minister Mario Monti spoke to Marchionne later on Tuesday and the two agreed to hold a meeting on Saturday, where the Fiat boss will inform ministers of the company's plans in Italy, the government said in a statement.

Economic Development Minister Corrado Passera and Welfare Minister Elsa Fornero will also be present, along with Fiat chairman John Elkann -- a scion of the company's founding family and key shareholders, the Agnellis.

Marchionne has been a divisive figure since taking over in 2004 an industrial powerhouse that once symbolised Italy's post-war economic boom.

Marchionne over the past few years has forged a partnership with once-troubled US giant Chrysler, which is now propping up Fiat's results.—AFP