Fiat SpA (IW 1000/48) CEO Sergio Marchionne painted a bleak picture of the Italian automotive 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.

Marchionne, who also heads Chrysler Group LLC, was responding to rising concern in Italy after Fiat last week said it will not stick to its previous investment targets and will 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 said in an interview with La Repubblica daily.

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."

"I am trying to profit from the recovery of the American market, exploit it to the maximum, to attain the financial security that would allow me to protect the presence of Fiat in Italy and in Europe at this dramatic moment."