A bitter Italian truckers' strike is seen cutting car deliveries by 40 percent in March, adding to the pain on the country's hard-pressed auto sector, carmakers said, with top producer Fiat planning to halt production at two plants next week.

Small car transporters unhappy with mounting fuel taxes eating into their already meagre returns h ave blocked roads, burned trucks and are preventing the delivery of thousands of vehicles throughout the country.

The protest, which started just over a month ago, is expected to lead to 60,000 fewer deliveries in Italy in March, two thirds of which related to foreign carmakers, Romano Valente, who heads Italy's foreign car producers association UNRAE told Reuters.

Fiat, the top local producer, has said it expects its March sales to drop by 10 percent as the strike forced it to produce 20,000 fewer cars.

"As of today, we do not see signs that the strike will be over and the situation appears to be worsening on the back of violent episodes such as the burning of vehicles as well as threats and physical aggression against the drivers who are not joining the strike," Fiat said in a statement.

"The economic damage caused by the strike is becoming unsustainable for Italy's automotive sector, which has already been hit hard by market developments."

Stoppage

Following the strike, Fiat said it planned to shut production at its Cassino plant on March 27-29 and at its Pomigliano plant, where the new Panda is being produced, on March 26-27.

The decision to halt production comes after previous stoppages at these and other Fiat plants in Italy, which the carmaker also blamed on the protests.

But the strike is also affecting foreign carmakers selling their vehicles in Italy.

"We see a 40 percent drop on expected car deliveries in March," said UNRAE's Valente.

"We are managing to carry out a few deliveries in Northern Italy, but the entire South is completely blocked," he added.

Smaller car transporters, who often own no more than one or two trucks, are attacking larger car trucking companies and car producers, demanding higher tariffs as soaring fuel prices and challenging economic conditions eat into their returns.

The protest reached a peak earlier this week, when a car truck was burned near Cassino, where Fiat has one of its five Italian plants.

ANITA, the association that represents the bigger car transporting companies, said protesters had become increasingly violent, throwing stones and threatening drivers.

Truckers' lobby Trasporto Unito said a last-minute meeting between large operators and small car truckers had been called in Milan on Friday to try and put an end to the dispute. (Reuters)