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Automobile market


More positive signs from the automobile market at the end of 2015. And the outlook for the new year is rather encouraging despite the absence of incentives aimed at promoting a substantial renewal of the current national running fleet 

Renzo Dotti

Selling cars in Italy has been rather difficult in recent years. The severe economic crisis that raged first in the US and then crossed over into Europe, the effects of which are still tangible for a large portion of the population, has been a difficult obstacle to overcome for many motorists, especially when having to decide whether or not to purchase a new vehicle. This greatly reduced sales volumes, losing more than a third of the average registrations recorded in the 2000-2010 period when, thanks to a series of government incentives, new registrations, on average, were more than 2,270,000. Last year, on the other hand, 1,574,872 (+ 15.8%) new cars were sold, and although these figures cannot be compared to those recorded in the first decade of the century, they must be considered a success, an upturn in sales that began in the early months of 2014 and has since been substantially consolidated.


Growing consistently

The 109.395 new registrations recorded in December 2015, an 18,6% increase over the same period last year, represent the nineteenth consecutive positive month for the market, a constant and stable growth, a bit of oxygen for a sector that paid a high price to the recession. Thousands of automotive companies and dealers went out of business, not to mention the tens of thousands of jobs lost. But now, as some claim, the worst is apparently over. Forecasts for 2016, albeit with due caution, are positive, so much so that reaching the target of 1.8 / 1.9 million new registrations, a volume in line with the country’s potential, is considered possible. This result will probably not be achieved during the current year, which should still guarantee around 1,650,000 new registrations, yet positive developments are expected in the years to come. Purchasing orders come first, and in December 2015 an encouraging 153,000 orders were placed, a 23% increase compared to December 2014, which will guarantee a good number of new registrations in the next few months. This, coupled to signals, few and  at times quite contradictory, of a general economic improvement, the launch of new models as well as a few much hoped for measures to contain the tax burden on citizens and companies alike, are all aspects aimed at favoring a substantial renewal of many currently circulating vehicles.


Renewing means less pollution

In a period distinguished by sensational scandals involving a few well known car manufacturers in terms of electronically manipulated emission data (we will not discuss it in this article), using “pollution” as a pretext to request government measures aimed at promoting a hefty renewal of the vehicles currently running on our roads, seems at least farfetched. Nevertheless, it would be good to remember that, according to recent data, at least 16 million euro 0-1-2-3 cars are still regularly used in our country. Therefore, without a gradual but steady and significant reduction of this number, any idea about improving the quality of the air we breathe, especially in our cities, is pure fantasy. True, most of these vehicles probably belong to a segment of the population with a reduced purchasing power, yet, it is undeniable that at the current renewal speed we will need about 20 years to get rid of all pre-euro 4 vehicles. Ironically, car manufacturers alone, along with their dealer networks, will probably be unable to cope with the situation, despite the aggressive marketing campaigns adopted in 2015, which have certainly contributed to facilitate the sector’s recovery. It is easy, then, to share the hope of  various associations on permanent structural interventions such as partial tax exemptions on new cars, through the opportunity of deducting part of the purchase costs against the scrapping of the old car.  However, a large number of young men and women are finding it increasingly difficult to emancipate themselves from their families due to the lack of suitable employment, which excludes many of them from the possibility of acquiring a new vehicle, despite the fact that the Consumer Confidence Index maintains positive values. Current youth unemployment figures, slightly lower yet still alarming, have resulted in providing a lower purchasing power to that segment of the population that represents the future of any country. 




How did things go abroad?

New registration figures in Europe and the US during 2015 were generally positive, and in some cases even amazing. According to preliminary data released by the industry’s associations, new car registrations in Germany were 3,206,042 (+ 5.6% compared to 2014), the best result in the last six years; significant volumes that have helped push domestic production, which in 2015 totaled 5,739,900 units. In France, 1,917,230 (+ 6.8%) new registrations were recorded in 2015. French manufacturers took 54.2% of the market share, while foreign producers recorded an increase of 9.4%. The Spanish market too scored impressive figures, reaching and exceeding the 1,000,000 new registration mark, exactly 1,034,232, with a 20.9% growth. These sales volumes have greatly helped to lower the average age of cars circulating in Spain, which dropped from 11.6 to 10 years. Record year for the UK market too, with 2,633,503 new registrations in 2015 (+ 6.3%). This is the 4th best result ever. Finally, the US market, with more than 17.3 million vehicles sold, even though that figure includes both cars (down 2.1%) and light commercial vehicles (+ 12.7%).



“Eco-friendly” targets

Italy is not always forced to chase after the targets set by the European Union and already reached by other nations. In terms of harmful emissions, for example, our country is in fact one of the most virtuous, having reached, already back in 2011 (with 129 g / km CO2), the target set by the European Commission for 2015 (130 g / km). Last year, in Italy, this figure was 115.1 g / km; this average takes into account CO2 emissions for new diesel cars (115.4 g / km) petrol cars (118.1 g / km) and vehicles with alternative fuel (113.7 g / km). Not surprisingly, the efficiency of new diesel engines equipped with the latest technologies is better than the same models equipped with petrol engines. And this is an essential factor in achieving the CO2 targets set by the EU for 2021 (95 g / km) along with other elements that positively affect the results in terms of emission reduction, such as vehicle mass and displacement, which in Italy are less than 1/5 and 1/3 respectively compared with EU average.



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