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Fiat CEO says current Opel bid is best it can do

VENICE, Italy (Reuters) - Fiat's existing bid for Opel, the European arm of General Motors Corp GMGMQ.PK, is its best offer, Chief Executive Sergio Marchionne said, as rival Magna MGa.TO stayed on track to close a deal with the German carmaker.

A general view of the main entrance of the Opel assembly plant in Antwerp June 15, 2009. REUTERS/Thierry Roge

“I don’t believe we could improve Fiat’s offer. It’s the most rational one we can put forward from an industrial viewpoint,” Marchionne said on Friday on the sidelines of an event.

Fiat bid for Opel last month but did not continue into a second round of talks.

Magna and General Motors hope to close the sale of a majority stake in Opel by the middle of September, ahead of Germany’s elections, an Opel supervisory board member told Reuters on Friday.

Marchionne said he had heard talks with Magna were “not going very well,” and added. “We have confirmed our interest.”

Marchionne said Fiat, which has taken a 20 percent stake in U.S. car maker Chrysler CBS.UL, was close to a deal on a venture with China's Guangzhou Automobile Industry Group -- something which has been brewing for over a year.

“We’ll see in the next few days. We are finalizing some steps. However, we are there,” Marchionne said.

U.S. RECOVERY FIRST?

Fiat had “good results” on both its home market of Italy and in Europe during June, Marchionne said. The company’s sales were down 3.5 percent in Italy in May giving it a market share of 34.38 percent, slightly up on a year ago.

Its sales in Europe rose 2 percent in May.

Marchionne said Europe would lag the United States in any recovery of the car market.

“America will start up again in the second half of 2009. Europe will be there later,” he said.

He confirmed the company’s targets for 2009 and said cashflow had improved since December. In January, it said 2009 group trading profit should be over 1 billion euros, down from 3.36 billion euros in 2008. Cash flow this year should be over 1 billion euros.

Marchionne said that reports Fiat might launch a bond were “rumors,” he added. “We will announce it when we announce it.”

Italian newspapers have reported this week Fiat might shortly launch a bond for around 1 billion euros.

Turning to Chrysler, which he is now running, Marchionne said soon he hoped to sort out which product lines would continue.

“Hopefully in the next 14 days we will clean that up and we will have at least a roadmap from a product standpoint,” Marchionne said.

Writing by Jo Winterbottom; editing by John Stonestreet and Richard Chang

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