Italy car industry 2012: trapped in a Dante’s inferno circle.

Year to date March 2012, industry was 21.1 down from the previous year. In March the market suffered the strike of Transportation sector, partially balanced by a huge level of self-registrations (12% of total). Strike penalized more the brands with low dealer stock altering single competitor performance.

Reasons behind the trend

Car industry in Italy was oversized for years due to huge self registrations (few years ago Fiat created a field force responsible to distribute vehicle with zero kilometers pre-registered to Fiat company), frequent introduction of scrap incentive programs and huge competition to conquest single client.

The Italian car Consumer was over spending for cars. Someone could say, for love! I say for excess! Italy is the second world’s country as ratio among vehicles and citizens. Each 1.4 people there is a car on the road. Excluding people below 18th, we have 1 car per each passenger.

Italy is also the second world’s country as tax evasion (there is not an official ranking on this data, of course) after Greek. That’s why, having to increase fiscal leverage, new Monti’s Government decided to heavily hit the consumption rather than increase direct taxes. Car sector was the preferred target.

During last year taxation over use and purchase of a vehicle dramatically increased in Italy.

The fuel cost, is around 30% up on year ago, with tax increase effecting by 70% of higher cost. No surprise if in the first two months of this year, vehicles fuel industry dropped 20% over previous year.

Yearly cost of ownership increased in proportion of the vehicle kilowatt. For luxury cars tax was increased over 200%.

VAT increased in Italy last September by 1 point, or 5%. Government has also officially anticipated a further 2 points increase, or 9%, planned for October 2012.

On top of Taxes, others good reasons to not purchase a new vehicles are the high unemployment (in February 2012 was 9.3, 0.2 up on previous month), with youth unemployment index close to 30%, high inflation rate (at 3.3 is higher than Euro zone) and the pro capite income flat at $ 30.100.

Italian GDP is expected to a -1.8% in first quarter 2012 and will be negative at least for the following quarter. The new Government is fighting to introduce strong innovation in Italian Governance and medium terms perspective can be encouraging.

As far as next months, no changes can be expected in the economic trend and consequently in the car industry performance.

Year to date March 2012

In the first quarter 2012 industry has lost 108.112 vehicles. Fiat is now under the 20% market share, while Volkswagen is the new Importer Leader ahead of Ford. Among Top 20, Hyundai, Kia, Dacia and Chevrolet are the only brands growing year over year.

Below the Top 20 Brand ranking:

 

 

Ytd 2011

Ytd 2012

Change

Share

Rank

Brands

516.215

408.103

(108.112)

2.011

2012

 

 

 

 

 

 

 

1

FIAT

105.392

78.250

-27.142

20,4%

19,2%

2

VOLKSWAGEN

40.388

34.742

-5.646

7,8%

8,5%

3

FORD

48.454

33.693

-14.761

9,4%

8,3%

4

OPEL

33.964

23.084

-10.880

6,6%

5,7%

5

CITROEN

24.168

21.425

-2.743

4,7%

5,2%

6

LANCIA

23.472

20.567

-2.905

4,5%

5,0%

7

PEUGEOT

22.796

18.177

-4.619

4,4%

4,5%

8

TOYOTA

23.291

17.210

-6.081

4,5%

4,2%

10

RENAULT

23.028

16.641

-6.387

4,5%

4,1%

9

NISSAN

18.861

15.409

-3.452

3,7%

3,8%

11

AUDI

18.443

14.640

-3.803

3,6%

3,6%

13

HYUNDAI

11.157

12.731

1.574

2,2%

3,1%

12

ALFA ROMEO

20.013

12.337

-7.676

3,9%

3,0%

15

MERCEDES

13.305

12.011

-1.294

2,6%

2,9%

14

BMW

14.516

11.784

-2.732

2,8%

2,9%

16

CHEVROLET

8.149

8.624

475

1,6%

2,1%

17

DACIA

6.515

7.688

1.173

1,3%

1,9%

18

KIA

5.151

7.088

1.937

1,0%

1,7%

19

SMART

6.815

5.846

-969

1,3%

1,4%

20

MINI

4.630

5.105

475

0,9%

1,3%

 

2012 Full Year Forecast

Local Association of Manufacturers Importers (Unrae) is forecasting a full year 2012 market at 1.380.000, which would represent a 21.4% drop on 2011. In December 2011 this Association was projecting the 2012 at 1.680.000.

Focus2move Research Team in December was forecasting the market at 1.620.000. However, after the first quarter, our projection had been revised and we now project the entire year at 1.520.000 or 12.7% down.

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