Green incentives helped boost sales in Fiat's home market

Driven by strong car and truck sales, net profit rose to 376m euros ($510m; £255m), up from 151m euros last year.

As well as strong sales, Europe's fifth largest carmaker also squeezed more profit out of each car as margins rose from 1% to 3.1%.

The Italian firm said the improvement meant it expected to cut its net debt below 1bn euros by the end of 2007 - from an earlier target of 2bn euros.

Looking ahead, the Turin-based firm added it also expected its full year net earnings to come in at between 1.6bn and 1.8bn euros - the top end of expectations.

As well as rising sales, Fiat put the latest improvement in its fortunes down to an improved product offer - buoyed by strong sales of the Panda and Grande Punto model.

The Italian government's campaign to get greener cars on the road also drove sales in the group's home market - with the firm taking a 31.8% share of the market in March.