* Fiat may not update investment plan as outlook uncertain
To keep global 2013 investments flat at 7.5 bln eur-source
* Q3 profit margin seen at 901 mln euros
* Company will remain under pressure to clarify strategy
By Jennifer Clark
MILAN, Oct 26 (Reuters) - Fiat is struggling to balance the demands of unions worried about Italian jobs and factories with the task of reassuring investors it is tackling profit-sapping excess production capacity.
The Italian carmaker is preparing to present third-quarter results and has pledged to give a strategy update on Oct. 30, just days after a perfect storm of plant closures, plunging profit and a state bailout rocked Europe's automotive industry.
Europe's debt crisis, government spending cuts and high unemployment have hit consumer budgets and sent demand plunging, with new car registrations in the region showing their sharpest contraction in 12 months in September.
Fiat's results come after Ford said it would shut plants in Belgium and Britain, with the loss of thousands of jobs, PSA Peugeot Citroen accepted state aid and even Volkswagen, previously more crisis-proof than its mass-market rivals, posted a big quarterly profit drop.
The Turin-based maker of the compact Punto and 500 models, which also controls U.S. automaker Chrysler, said on July 31 that it would update targets when it presented third-quarter results to reflect slower European sales.
Full-year net profit is seen at 1.29 billion euros ($1.67 billion), at the lower end of its target of between 1.2 billion and 1.5 billion, a consensus of up to 20 analysts compiled by Fiat showed.
But investors intent on looking beyond the numbers for longer-term answers on Fiat's industrial plans may be disappointed as the uncertain market outlook is likely to stop Fiat from providing an update on five-year plans for fear its predictions may not come true.
The company denied a press report last week it would present a so-called 'Marchionne plan', named after chief executive Sergio Marchionne, to produce Chrysler and Jeep models at its five Italian plants on Oct. 30.
``If Marchionne is not unfreezing the investments for future car launches, we need to know what he is doing,'' said an analyst who rates Fiat a 'sell'. ``We'd also like to know what other solutions he is looking at to deal with overcapacity.''
Many equity analysts have already cut the stock and Moody's downgraded Fiat a notch to Ba3 in October. The ratings agency sees European light vehicle sales falling eight percent this year, and three percent in 2013.
``We feel there is substantially more downside risk on Fiat's European operations than upside risk on its North American business,'' wrote Societe Generale, rating Fiat a 'sell'.
Fiat is exactly halfway through a 2010-2014 business plan released in April 2010, when it was forecasting a recovery in the European car market.
The plan, which is no longer a reference point for investors or the company, envisioned spending 16 billion euros in Italy on new car models and more than doubling EBITDA to nearly 15 billion, a target that was later cut.
Fiat cut its 2012 forecasts earlier this year, and never adjusted the rest of the plan, except to put its Italian investment plan on hold - sparking a firestorm of criticism in Italy that has grown in intensity in recent weeks despite Fiat's reassurances it does not plan to shut plants.
Instead of running at full capacity as forecast back in 2010, production at Fiat's plants has been halted for most of the autumn.
The carmaker is likely to keep its goal for total 2013 investments flat at 7.5 billion euros, said a person familiar with the situation.
This is not going to go down well with Italian unions, which have long complained about a lack of investments at home.
``Fiat has delayed its investments in Italy for two years,'' said Flavia Aiello, who represents workers at Fiat's flagship Mirafiori factory in Turin. ``We did our share. The company now has to make the move.''
($1 = 0.7711 euros)
(Reporting by Jennifer Clark; Editing by Helen Massy-Beresford)