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01/03/2013
THE ONGOING NIGHTMARE

THE CAR MARKET
Lots of theories, proposals, recriminations. In the end, only one certainty looms over everything: the decline in the car market in 2012 will be remembered as one of the most disastrous of several years. Unfortunately, it won’t be the last

Renzo Dotti

DO YOU REMEMBER THEM? For most of us, they were among our happiest moments. Collecting it from the dealership  (perhaps after a wait of many months), driving it home and relishing being behind the wheel for the first time, showing it to friends and relations, keeping it as clean as it was when it left the factory...in other words, enjoying small moments of glory with our beautiful new car, whatever make it happened to be.
Obviously, it didn’t happen every year, but there was a certain regularity, especially for the many who saw a car as something more than simply a means for getting from one place to another. Inevitably these feelings became increasing rare and nowadays most of us change our car, not for the pure joy of it, but only out of necessity, when there are no other alternatives.
You may think I’m exaggerating slightly, but nobody can deny that the year the Italian market had record registrations of 2,500,000 vehicles seems like a century ago. And yet it was only in 2007. In only 5 years the market has been reduced by about 1,100,000 vehicles, or 44%, and closed 2012 with 1,402,089 registrations. In the last month of the year there were 86,735 new registrations, a downturn of 22.5% compared to December 2011. It is the thirteenth consecutive falloff, proof of a negative trend that is strong and stable and is not expected to change, at least not in the short term.

Requests, proposals and undertakings
Faced with this commercial, but also industrial, massacre, the market’s players cannot remain passive and untiringly put forward proposals that will provide some oxygen for a sector that is obviously suffocating.
Anfia primarily, through its chairman Roberto Vavassori, emphasized with renewed vigour that the undertakings on the 2013 agenda that cannot be postponed must include an action plan, coordinated by the representatives of the supply chain and institutional bodies, to safeguard and re-launch the automotive industry in Italy by aiming at more competitive legislation. Apart from the collapse of the demand for cars, in 2012 there was also a considerable decrease in the number of vehicles made (-17.8% in the first 9 month) and cars in general (-15.4% in the same period, -46% compared to the first 9 months of 2007), which is much more disturbing because there is the risk that it will increase the current haemorrhage of companies in the sector. The proposals put forward by Anfia are clear with regard to the market, production and attracting new investments. On the one side, review measures that are too penalizing and reduce fiscal pressure on drivers and firms; on the other, reduce the cost of energy, guarantee tax incentives for investments in research and development, and improve access to credit by firms.

A little more confidence but no inclination to buy
According to ISTAT, in December 2012 the consumer confidence index increased from 84.9 to 85.7 (base 2005=100). This news may appear to be a positive sign, albeit slight, but in reality the vicelike grip of the continuing crisis is still having a profound effect on incomes and feeds a climate of pessimism that seems to be impossible to avoid.
On the basis of the Auto Report 2012, presented last December by ACI and CENSIS, the inclination to buy has been literally halved: in 2011, 7.6% of interviewees said they intended to buy a new car the following year; in 2012 the percentage not only halved (3.7%), 52.6% of interviewees said that they had no intention of buying a car in the next three years (in 2011 it was 43.8%). 44.7% also believe that the market will take off again only when the crushing intensity of the crisis is diminished, but 53% declared that even if they received a 30,000 euro windfall, they would save “the miracle”, not spend it.  As the chairman of ACI, Angelo Sticchi Damiani, wisely pointed out – “the car has become a luxury we cannot do without because there is still no alternative”.

The paradox: used less but costs more
The Auto Report 2012 dealt with another subject that was also very interesting: although the current economic situation has forced Italians to be parsimonious about using their vehicles, running costs increased considerably last year. A 5% to 7% reduction in the annual km travelled corresponded to the average increase in the cost of maintaining a car that is so “dear” to us in both senses of the word.
In 2011, between fixed costs (insurance and road tax) and variable costs (fuel, motorways, fines, etc.), a car cost an average of 3,278.00 euros, in 2012 the cost rose to 3,425.00 euros, 4,4% more. 72.8% of the biggest increase (147 euros) referred to the cost of fuel, representing 47.8% of the total cost. Over the past two years a full tank of petrol or diesel has increased by 25%. Despite travelling less, the unit cost per km has risen by 11.3%.

2013 continues to be difficult
All these considerations could be seen as a highly imaginative puzzle which, when properly pieced together, will form a picture with particularly murky colours. In fact there do not appear to be any shafts of light that would suggest real impetus in the short- to medium-term. On the contrary, the situation is so compromised that even incentives would seem to be no more than nine-day-wonders.
Major experts effortlessly predict that 2013 will continue to be difficult and that the economy, employment and the necessary reforms should take priority over everything else. Even our beloved cars.   


• Bi-fuel and hybrids: good news for the environment too
Emerging from a forest of negative signs are the preliminary registration data by type of fuel. They confirm the excellent results for alternative fuels (LPG,  gas, electric and hybrid) that in 2012 gained a market share of 13.5% compared to 5.6% in 2011. All this means a reduction in average CO2 emissions by new cars which, in the first 11 months of 2012, was 126.3 g/km –  a positive record for Italy – against an average of 129.9 g/km at end 2011. Specifically, LPG vehicles registered in December represented 11% of the total (and 9.1% for the whole of 2012), against 5.2% a year ago, while the market share for gas was 4.4% in December (and 3.8% for the whole of 2012) against 3.2% in December 2011. Even though coverage by the gas distribution network is insufficient,  good margins of improvement are forecast for this type of vehicle.  Low but significant numbers also for hybrid vehicles, which went from  0.3% in December 2011 to 0.9%  in December 2012, with a market share of 0.5% for the whole of 2012..

• Europe is also marking time
The news that the European car market also had a two-figure downturn in the last month of the year (-16% compared to December 2011), demonstrates once again that the continuing economic crisis on the continent is the main reason for the lack of car sales and more. According to data published by ACEA, in the extended European Union and EFTA, total volumes for the whole of 2012 were 12,527,912 vehicles, a falloff of 7.8% compared to 2011. The major markets closed the year in the negative with heavy losses for Italy (-19.9%), France (-13.9%) and Spain (-13.4%). The German market, the real driving force in Europe, recorded 204,331 registrations in December, a downturn of 16.4% against December 2011. In 2012, total registrations in Germany were 3,082,504, with containment of the falloff at 2.9% of the previous year. The only discordant voice is that of the British market, which closed December with a plus mark (+3.7%) and a total of 123,557 registrations. In 2012 the UK market stood at 2,044,609 vehicles –  the highest annual volume since 2008 –  growth of 5.3% compared to 2011, but still a long way from the 2007 pre-crisis levels (-14.9%).

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