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08/07/2013
THE VALUE OF NUMBERS

THE CAR MARKET
The first four months of 2013 also closed with negative figures and forecasts for the rest of the year cannot disregard the critical economic situation we are experiencing

Renzo Dotti

IT’S PRACTICALLY a wager. When will we see a reversal of the negative trend that has characterized the Italian car market for so long? Month after month, the decline continues undaunted and although the numbers have been reduced considerably in the past two years, the impression is that we’ll have to wait a lot longer before we see the now “mythical” plus sign before sector trend percentages.
If we compare the same month in 2012 (which already had a strong downturn in sales), then it’s logical that sooner or later this trend  should change. But if the domestic economy continues along the same path of consolidated falloff in GDP that has been the case for the past seven quarters in a row, it will be increasingly difficult to sell new cars.

Which also reflects on manufacturing
It was bound to happen, some might say, and yet the unfavourable -  but not very unfavourable - trend shown in the last analysis could be considered by the most incurable optimists to be the first weak step towards a turnaround. Unfortunately, I don’t think that this will be the case.
According to data published by the Ministry for Infrastructures and Transport, in April the Italian car market had a total of 116,209 registrations, 10.8% fewer than in April 2012, when there were about 130,321, which was fairly low compared to the previous year.
Overall, in the first four months of 2013 fewer than half a million cars were registered, precisely 471,750, a downturn of 12.3% compared to the same period last year, which was totally negative but exceeded 538,000 cars.
As pointed out astutely by Anfia president Roberto Vavassori, unfortunately this bad news has almost direct repercussions on manufacturing which, as far as cars are concerned, fell by 8% in the first quarter of 2013 compared to the first three months of last year. A downturn that in many ways seems even more relentless than the sales figures to the extent that perhaps it won’t take many more years before Italy will no longer be one of the world manufacturers of a certain substance.  Indeed, the figures suggest that this “downgrading”  has already happened.

The supply chain holds up thanks to exports
If we make fewer cars there will be less work and a lot of problems for the hundreds of thousands of people who work in the vehicle manufacturing and spinoff industries.
Fortunately, as we are wont to say, despite a suffering domestic market, exports are giving the automotive supply chain the necessary shot in the arm.  For automotive components alone in 2012, exports stood at about €18 billion, with a positive commercial balance of €7.4 billion.
It is obvious to Anfia and the supply chain it represents that it is not government aid that is required but a serious industrial policy oriented towards increasing direct or indirect employment in the sector and supporting exports that give the entire system a vital breath of air.

A special interface for blocking the decline
Faced with one of the most insidious economic crises in the memory of modern history and one that is taking us backwards by 40 years, not only in the number of cars sold, but also in many other areas of our daily lives, the automotive world – Anfia in particular – is counting on the setting up of the Automotive Council that last autumn was proposed and welcomed by the Ministry for Economic Development.  It would be an operational task force of ministries and operators in the automotive sector and, based on the model of the United Kingdom Automotive Council, it would become the special interface on legislative measures concerning mobility, thereby avoiding fragmented and uncoordinated interventions.
The steps that should be taken to give increasingly declining confidence a kick start in the mid-term, are the reduction in the cost of owning and using a car, such as tort liability, tolls and excise duty on fuel.

Dark clouds remain on the horizon
Given that it is unlikely, in the short- to mid-term at least, that even some of the requested measures will be adopted, the fact remains, as Unrae director Romano Valente mentioned, that in the past three years the volume of lost car sales in Italy was so big that it was equivalent to Holland’s entire automotive market. Moreover, the recovery, when it happens, will be very moderate and for 2013 a ceiling of 1,250,000 cars sold is forecast, the same values of the Seventies.  A more thorough analysis affords a simple explanation: of the purchases by individuals –  which had the biggest loss –  the negative peak was for young people between 18 and 29 years of age who represented 14% of the market in 2005 but only 9% today. As we are constantly reminded by youth unemployment statistics, if you don’t have a job you can’t buy things. A static market also damages the State, which last year collected €3 billion less in taxes from cars and spent hundreds of millions of euros on social safety nets for workers in the sector. In this closed circle that is almost impossible to break (fewer cars  - fewer jobs – less income for the State  –  no help for the sector – more costs for the State), finding a Solution with a capital S  could lead to nothing serious. It wold be better, perhaps, to be aware of the great change that is taking place and adapt to it.

• The most sold models

As usual, during the first four months of 2013 Fiat Group cars had the highest number of registrations on the domestic market and monopolized the top positions.

The first three positions were taken by Fiat Panda (39,003), Fiat Punto (24,378) and Lancia Ypsilon (16,893), followed in fourth place by Fiat 500, which rose to third position compared to the latest survey.
The diesel car classification is much more variegated.  Dominating here is the Volkswagen Golf with 11,165 vehicles registered in the first four months, followed by Fiat 500 L (9,534) and Nissan Qashqai (8,137).
Generally speaking, by looking at the various models in the classification (Renault Clio, Peugeot 208, Volkswagen Polo, Ford Fiesta), it is easy to guess that once again Italians have aimed at cars that offer better value for money, encouraged also by the manufacturers’ particularly aggressive  policies.

• The ghost of the electric car

They were created to be a panacea for all environmental problems associated with transport, but very few electric vehicles have been sold on world markets. And Italy is no exception, on the contrary.

In the United States to date the percentage of electric cars registered is very low (only 0.1% ), but in Italy the figure is so small that it’s almost too absurd to mention. So far, the number of electric cars sold in Italy represents about 0.0003% of the total. In absolute terms, more or less 30 cars a month.
You can’t go far with these numbers. In the US,  in fact, major brands like General Motors, Toyota and Ford have given their unequivocal opinion: for the moment, electric cars have a marginal role in the market because of high manufacturing costs, a lower range and the excessive weight of the batteries. And to make it clear that there will be no sharp reversal of the trend in the near future, the managers of these companies have emphasized that currently there are no technological innovations that can solve these problems.

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