A LITTLE BIT OF HEALTHY REALISM
THE CAR MARKET
Italy’s car sales continued to fall in the first months of the new year. The situation is clear to everyone and actions for turning it around appear to be a long way off
HANDS UP who believed that the domestic car market would begin 2013 with positive or, at least, encouraging figures. No one, because in this economic scenario, not even the most optimistic or reckless analyst would venture to predict the recovery of a sector of durable and costly goods that is obviously suffering from the lack of confidence that permeates Italy as a whole.
Despite everything, common sense is still part of human nature, which means that everyone, even someone who knows next to nothing about cars, realizes that, unfortunately, this trend will continue its inexorable descent to a level that we would never have believed just a few years ago. So where will it end?
A few figures just to shape the picture everyone is seeing and, why not?, to try to guess how the coming months will develop.
According to data published by the Ministry for Infrastructures and Transport, in February the Italian car market had a total of 108,419 registrations, 17.4% lower than February 2012, which closed with 131,271.
In the first two months of the year, total registrations were only just above 222,000, a downturn of 17.3% against the first two months of 2012, which was already very critical with a 17.6% falloff compared to the same period in 2011.
In brief, we are talking about a significant downturn in a trend that is already negative. And two negatives don’t cancel each other out but, sadly in this case, they are added together to show a market with lower volumes than thirty years ago.
And it is all too easy to imagine that the drop in registrations will continue without respite in the first six months of 2013 at least. The expected decline in Italy’s GDP that all the national and international economics organizations predicted again this year, will “guarantee” that the car market will weaken by 15%; in other words, there will be just over 600,000 new cars on our roads from January to June 2013.
A closer look
Actually, this isn’t the real situation either. The real situation is even worse. We know very well that a significant percentage of new cars are dealer-registered. And it is true that dealers have reduced this practice to absolute numbers, but not the percentage.
Here, too, a few figures will make things clearer. In 2010, when 1,971,058 vehicles were registered, dealers contributed 132,202 to this huge result. Two years later, when just over 1,400,000 vehicles were registered, there were over 120,000 “zero kilometres” plates. A totally different weight that is a demonstration of the dealers’ not inconsiderable attempt to prevent a crisis.
Basically, the real figures or, at least, those that measure the pulse of the situation, show that in two years sales to individuals have fallen from over 1,391,000 to little more than 875,000. Half a million new cars fewer!
Faced with a trend that continues to get worse, with intolerable consequences for manufacturers and all operators in the segment who have been waiting for months for signs of a re-launch, the sector’s associations have certainly not been not been standing by and watching.
Anfia, for example, launched the idea of as soon as possible setting up an automotive sector council which, with the government’s support and the active participation of the relevant ministries, the institutes handling company internationalization and development, and representatives of the national industrial supply chain, would be a special interface for legislative actions in the world of mobility and would monitor the effective implementation of the practical points on which it would be based.
The first steps naturally include giving the market some oxygen by reducing and rationalizing taxes on cars and running costs. For example, the first intervention could be on insurance, given that Italy’s tort liability is the most expensive in Europe, with average rates more than double those in France and Portugal, 80% higher than in Germany and almost 70% higher than in Holland.
From saying to doing...
It’s all true. But what can we do to stir up situations in Italy that have been established for decades and have guaranteed dominating positions for more people than we can imagine?
Furthermore. We know that reducing any form of taxation nowadays is a Utopian operation, at least until we can guarantee that the current elephantine “public machine” will actually function.
So, with a healthy dose of realism, it seems to me that little or nothing will be done about loud requests for supporting the automotive world. As always in this country, a dismal zero is the number that appears in the “real” industrial policy box, with a drastic reduction in the fabric of small and medium size businesses and the dramatic worsening of the labour situation as the easily predictable consequences.
Bonus fino a 5 mila euro per auto ecologiche
• Ecological incentives
Some timid signs of support for the sector seem to be coming from the State. For this year, it will guarantee incentives for anyone who buys a gas (LPG or methane), hybrid or electric car, with CO2 emissions of up to 120 g/km. The available resources - €40 million for 2013 – are small and in early March there was nothing left of the €3 million for the purchase of cars with carbon dioxide emissions between 51 and 96 g/km, basically bi-fuel vehicles, just as there is nothing left of the €1.5 million for vehicles with emissions of up to 50 g/km - in other words, almost all electric and a couple of hybrids. As to the rest, only €4 million has been used of the sum set aside for scrapping cars that are at least ten years old and allocated for the purchase of public or private vehicles used by third parties or the purchase of vehicles used for business.
• Continental decline
It was a difficult start to 2013 for the European car market. In the first two months, volumes totalled 1,748,071 units, a downturn of 9.3% compared to the same period last year. The negative trend that began in October 2011 has worsened and only the United Kingdom has confirmed positive performance (+7.9%). The other nations, Germany at the top (-10.5%), are obviously marking time. According to the analysts, any improvement in trend will not come before the second part of the year and will depend on what the governments of the countries most affected by the crisis will be able to recoup in competitiveness and in improving the climate of consumer and business confidence.