Italy's revised taxation plans expected to boost registrations but hit RVs
In its budget for 2019, Italy has revised its taxation system for all new cars registered from 1 March 2019, reports Autovista Group. The new plans are expected to boost registrations in the short term but have a negative impact on residual values, especially for diesels, as the used car market will be flooded.
Under the new rules, all new cars emitting less than 90g/km CO2 will be eligible for a bonus payment which increases as emissions go down. Cars that emit more than 160g/km CO2 on the contrary will be penalised with a penalty from €1,100 to €2,500.
Not all ICE cars will fall under the new tax rate as small family cars will be exempt, which will undoubtedly come as a relief to Fiat Chrysler Automobiles, as small family cars dominate the Fiat portfolio. Likewise, FCA does not offer any hybrids or electric vehicles in Europe, even though the Fiat 500 is available as an electric car in the US.
Used car market
Stefano Ferruzzi, Country Manager for Autovista in Italy, expects a negative impact on the used car market: “In the first two months of 2019, we will face a strong registration volume for >160g/km cars, many of which will then be offered for sale as 0km used cars. This will further penalise the used car market, already impacted by the enormous stock of 0km used cars available - 178,000 cars at the end of December, almost 10% of all new car registrations in 2018.”
“As a consequence,” he added, “I expect an overall decrease in residual values (RV) as the 0km cars will be priced low in order to be sold on quickly.”
RVs for diesel cars have not hit rock bottom yet, predicts Mr Ferruzzi: “I expect a further penalisation of diesel cars as almost 70% of the 0km stock is diesel and diesel. Demand for new diesel cars dropped by 12% in 2018 with 140,000 fewer cars registered than in 2017 and demand for used diesels is declining similarly – or even more – as a few cities have introduced bans on pre-Euro 5 diesel cars.”
According to Autovista, diesel RVs will fall by 2% in 2019, petrol RVs will remain stable and hybrid RVs are expected to go up by 3%.
Image: Fiat 500 in Rimini