WARSAW, Poland—Italian carmaker Fiat says it plans to cut about 1,500 jobs at a factory in Poland due to falling demand for cars on the European market.

The layoffs amount to nearly a third of the sites workforce of 5,000.

Fiat Auto Poland S.A., the companys Polish subsidiary, said in a statement the very negative situation in the auto market is forcing the cuts at the factory in the southern Polish city of Tychy.

The site produces the popular Fiat 500, the Lancia Ypsilon and the Ford Ka.

Fiat says it is facing serious difficulties and that there is no prospect for near-term improvement.

It said the sites output fell to under 350,000 cars this year from 600,000 in 2009.