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07/03/2012
NO BRAKES

THE MARKET
The downturn in the Italian auto market continued in 2011. A situation that was totally expected and must be taken into account again this year. And not only…

Renzo Dotti

Never as in the past two years has Italy’s car registration figures based on exchange of data between ANFIA and UNRAE given the sector so little satisfaction and confirm what everyone has been aware of from some time.

Fewer and fewer new cars are being registered and the Italian car market has regressed by 15 years to 1996 levels. The 1,748,173 cars registered during 2011 represent a falloff of almost 11% compared to 2010, when figures were already discouraging, and totally bears out the negative forecast made by this magazine at the start of last year. And it could not be otherwise given the current economic cycle.

I use the word cycle because I don’t think that it has escaped anyone’s notice that words like situation, context or moment imply a time limit, which is not the case, from this point of view at least. Few people, and certainly not the most qualified and prudent economic analysts, dare to predict how or, above all, when the crisis will end, precisely because it is obvious to most that the changes taking place are in danger of having significant repercussions on the world’s current social and economic structures.

So talking about car sales in Italy during this past year can only confirm, from a limited but well defined angle, what I have just said.

 

The cold facts

We begin with the latest, those of December 2011 when the 111,212 vehicle registrations meant a significant -15.30% compared to the same month last year which, in its turn, was over 21% lower than the incentive-inflated December 2009 figure.

The domestic brands (-21.19%), basically the Fiat group, in this regression stand out because of a 10 percentage point higher loss than foreign cars (-12.68%). To December 2011, 31,829 domestic brands were registered compared to 79,383 foreign brands; significant figures that acquire greater value if translated for the entire year when, meagre consolation for the supporters of Made in Italy, the 518,698 car registrations (-13.72%) reduced the percentage difference against foreign cars (-9.63%), which stood at a total 1,229,485 registrations in 2011.

 

Not downhill for all

A distracted look at ANFIA figures based on Ministry for Transport data might seem to confirm that, compared to 2010, the 2011 results were negative for practically all car manufacturers.

A trouble shared is a trouble halved, perhaps? Not in this case. Although it is true that the big brands that are accustomed to significant volumes, like Fiat (-19.47%) Citroën (-22.79%) Ford (-19.54%) Peugeot (-25.80%) and Renault (-21.45%), took a beating, and others like BMW, Opel, Honda and Suzuki had to cope with considerable losses, it is also true that there are some happy islands in this sea of melancholy. 

Beginning with an historical Italian company like Alfa Romeo. Thanks to the success of the Mito and, especially, the Giulietta, in 2012 over 58,000 vehicles were registered, an increase of over 12% compared to the previous year’s results. Staying with the Fiat group, Jeep also performed extremely well and more than doubled its low figures from 3,618 to 7,878 (+117.74%) in the space of a year. Satisfying results also for the bestsellers like Dacia (+15.34%) Hyundai (+20.26%) Nissan (+17.88%) and Volvo (+5.68%). However, their combined figures were no match for the 138,488 vehicles sold by Volkswagen in 2012, which exceeded the 2010 figure by 1.67%. Undoubted success for the Wolsburg company and further proof of the strength of what is now the global reference group.

 

2011 bestsellers

The 2011 classification maintained the tradition of placing Fiat cars firmly at the top. The top two bestselling cars in Italy were the Fiat Punto with 121,963 vehicles, and the Fiat Panda with 115,613. Also on the podium, but much lower, was the eternal Ford Fiesta with 65,139 registrations. Fourth place went to the Fiat 500 (59,821) and fifth place to the Lancia Ypsilon (54,824). They are followed by Volkswagen Golf and Polo, Citroën C3, Opel Corsa and, in tenth and last place, the Alfa Romeo Giulietta. With four Italian brands at the top of the list, it would appear that they are still the most popular, but the total figures are pathetic and emphasize the problems that the Fiat Group encountered in Italy in 2011.

 

A thick fog on the horizon

So the prospects at the start of the new year are anything but positive. The domestic and European economic and financial scenario is far from promising and all the indicators make it easy to predict problems for car sales for a long time to come.

ISTAT data indicate the continuing downturn in consumer confidence, which fell from 96.1 to 91.6 in December, and a particularly marked deterioration of the general economic climate, with an index drop from 83.21 to 77.2. In the durables category, which includes cars, opinions about the convenience of immediate purchase have gone from -87 to -99 and the only positive note is given by an intention to buy in the coming months that has risen to -58 from -64.  If, as ANFIA director general Guido Rossignoli remarked, we add to this that all kinds of costs continue to rise in the automotive sector, it is impossible to foresee the sudden reversal of a market whose fate seems to have been sealed for 2012. 

With increased motorway tolls, more expensive liability insurance, higher excise duty which means more tax on fuel, and one percentage point more on VAT, now 21% but could very well reach 23%, even the less pessimistic believe that, probably, registrations will not exceed 1,700,000 in 2012.

 

Consequences for the sector 

Many have sounded the alarm about the probable massacre of jobs, the closure of a great many dealerships, the total destruction of allied industries and negative consequences for the State with billions less coming from VAT and various other taxes. But are we certain that government incentives are the panacea that some are still calling for?

In all likelihood, the same incentives that “inflated” last year’s figures could now be a less traumatic way of “guiding” dealerships in trouble out of the market. But nothing more.

Every intervention must be systematic given that when these firms leave the dealer market they put at risk not only the sales network, but also all related sectors. A situation that would be difficult to unravel because, let’s not forget, the segment as a whole employs 1,200,000 people, represents 11.4% of GDP and contributes 16.6% to the country’s inland revenue.

Lastly, analyses must be compared with reality. In Italy and, indeed, in all developed countries, the reality is the profound crisis of a system in which the importance of the car world will depend on its capacity for renewal and its ability to accept even the bitter changes that it will, inevitably, meet.

 

 

• Two-speed world market 


Some go up, some go down. It’s all very simple. Even during a troubled year like 2011, the global car market grew. Almost 60 million vehicles were sold, an increase of over 5% thanks to the so-called “BRIC” countries, in other words, Brazil, Russia, India and China. And to describe these countries now as “emerging” is somewhat of a euphemism. Brazil, China and India in particular are now the real colossi of the world, with incredible prospects for growth that will see them taking over from nations that have led the world economy to date. And it is not only for the car market that  Western Europe and North America are scenarios in which positive figures in terms of growth will be increasingly difficult to achieve. At world level, the aim is two-figure growth over the next two years (+18%), driven in particular by the “emerging” economies of those nations that car manufacturers are counting on.

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