UPDATE 1-Fiat cannot keep all Italy plants open-CEO

* CEO says world has changed profoundly

* Says November sales were as expected

* Says up to government to decide on incentives

(Adds details, background)

By Gianni Montani

TURIN, Nov 20 (Reuters) - Fiat SpA (FIA.MI) may have to close factories in Italy, given sharp falls in auto sales which have changed the sector dramatically, Chief Executive Sergio Marchionne said on Friday.

Keeping all the factories open "is a request that is not feasible," Marchionne, who is also head of U.S. car maker Chrysler, told reporters at an event.

"The world has changed profoundly. We cannot go back to a reality that doesn't exist anymore," he said.

The global car industry has been rocked by plunging sales as consumers rein in spending because of tighter credit.