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Italy Autos Report Q4 2009
Market |
Automotive and Parts |
Report Type |
Market Research |
Country |
Italy |
Published |
16 September 2009 |
Number of Pages |
46 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
The Italian Association of the Automotive Industry (Anfia) has estimated that H109 vehicle sales in Italy reached 1.23mn units
The Western European automotive market posted an overall 4.6% year-on-year (y-o-y) increase in vehicle sales, to 1.38mn units in June this year, reflecting the success of vehicle scrappage scheme introduced by the governments in Germany, France, Spain, alongside Italy. However, as examined in this report, Italy’s scrappage scheme was not only aimed at boosting vehicle sales in the market but also replacing its older pollutant vehicles for new eco-friendly models to help reduce overall emission in the country.
The Italian Association of the Automotive Industry (Anfia) has estimated that H109 vehicle sales in Italy reached 1.23mn units, down by 12.7% y-o-y, clearly much moderate than the nearly 33% y-o-y fall seen in the beginning of this year. However, the benefits of the scrappage scheme have remained limited only to the passenger car segment while the commercial vehicle sales continue to remain under the effect of the overall slowdown in economic activity. As such, we maintain our 2009 sales forecast of a 20% y-o-y fall in vehicle sales, to 2.13mn units, which could be followed by a further 3.6% y-o-y decline in 2010; the latter coming from our concerns about a pre-emption in vehicle demand from the ongoing scrappage scheme.
From the point of view of production, however, carmakers have received little solace from the scrappage scheme, resulting in carmakers producing 34.7% fewer vehicles, to 346,319 units in 5M09, compared with the same period last year. With exports falling by nearly 44.8%, during 5M09, there is little hope that the carmakers will be prompted to increase demand significantly for the remainder of this year, meaning that we forecast an overall 26-27% y-o-y fall in production by end-2009. Production in 2010 will fail to pick up, in fact declining marginally by 0.5% y-o-y. Although, carmakers will eventually increase output post-crisis, high operating costs will impede any major investment and hence production going forward until the end of our forecast period in 2013.
The saturated nature of the Western European market is pulling Italian carmakers to seek for newer markets and alliances abroad in an attempt to increase their sales. Fiat, the market leader, which already had tie-ups with India’s Tata Motors and Russia’s Sollers (formerly Severstal-Auto), has moved in to own a 20% stake in US carmaker Chrysler after the latter’s exit from bankruptcy on July 10. However, company CEO Sergio Marchionne has stressed that Fiat will focus on remaining 'financially viable' during the downturn and has accordingly announced plans for restructuring its production schedule in Italy. Italy’s supportive government policy has helped to place the country on the fourth position of the Business Environment Rankings for the autos industry in Europe, clearly well ahead of France and Spain. However, high cost manufacturing and announcements similar to those from Fiat could undermine its position in the rankings going forward.
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