Rome, 30 Sept. (AKI) - The Italian government is considering whether to offer new incentives to help car giant Fiat and the country's troubled automobile industry recover from the current global recession. Prime minister Silvio Berlusconi on Wednesday said the government would not rule out further consumer incentives during a TV interview with Sky news.

"We will examine the situation with a great sense of responsibility, " Berlusconi said.

"We have already obtained most positive results by intervening in the sector and will extend the measures when they expire if required," Berlusconi added.

Fiat chief executive officer Sergio Marchionne said he welcomed Berlusconi's comments after the executive had warned it would be disastrous for the industry if the government dropped current car industry incentives.

"It's encouraging. I appreciate what he (Berlusconi) said. We're willing to work together to find a solution on incentives for next year and for 2011," Marchionne told journalists.

In February, the government introduced incentives for people trading in the most polluting cars and for buyers of eco-friendly cars.

Governments around the world have been offering incentives for people new cars as they attempt to support an industry facing weakened demand due to the financial crisis.

Marchionne was due on Wednesday in Rome to discuss incentives with the Italian government before travelling to Detroit with Italian industry minister Claudio Scajola.

Fiat has recently taken a 20 percent stake in Detroit-based US car giant Chrysler, which is currently going through a slump in sales due to a lack of demand in Europe and the US.

Speaking at the launch of the new Fiat Punto Evo in the northwestern Italian coastal town of La Spezia on Tuesday, Marchionne said governments should reduce incentives to buy new cars gradually over the next two years.

Marchionne added that a gradual decrease in incentives would allow the industry "at the same time (to) address overcapacity."

“If it was me, I would be planning for a gradual reduction of incentives over 2010 and 2011 and at the same time addressing the overcapacity,” Marchionne said.

Fiat in July signed a 400 million euro deal with Chinese automobile manufacturer Guangzhou Automobile Group in the Italian capital, Rome, bringing Fiat a step closer to tackling China's booming market.

The Fiat-GAG agreement is to build a plant in China to produce 140,000 vehicles a year and over 220,000 engines.

The first models built at the plant will be the Fiat Linea, a model predominantly sold in Latin America, India, the Middle East, and Eastern Europe.