Analyses
4 jan 16

Italy automative market : Big appetite for small domestic cars

The Italian car market was strongly affected by the economic crisis period that started in 2008. In particular, between 2007 and 2013 registrations in Italy fell from 2,493,000 units to 1,360,000 units. The turning point came as 2013 gave way to 2014, and sales have stabilized at the lowest level reached in 2014. In 2015 there began a double-digit recovery in registrations.

 

The final car registrations on the Italian market in the first eight months of 2015 amounted to 1,065,556,, an increase over the same period of 2014 of 15%. If this growth rate is maintained until the end of the year, 2015 would close with a volume of around 1,560,000 registrations, substantially up from 2014 (1,359,767 registrations), but still far from the pre-crisis levels. The ongoing recovery of the Italian car market was mainly driven in the first half of 2015 by company purchases. This component of overall demand has however slowed down with each passing month, while the private sector has been stimulated by automakers’ promotions, by expectations of economic recovery and especially by the need for many families to replace their ageing cars.

The impact on demand of the hesitant economic recovery is modest, as is clear from the data on GDP growth in the first half of 2015. In the first quarter, growth was 0.4% and in the second quarter and 0.3%. The two consecutive growth figures clearly indicate that the business cycle has been reversed and that the recovery has begun. It should however be noted that the rate of recovery is still very modest, especially considering that the gross domestic product in the second quarter of 2015 is still down 9% on the pre-crisis levels and is even at the levels ​​of the beginning of the century, that is fifteen years ago.

Italians prefer Italian
On the Italian passenger car market the most significant presence is constituted by the four brands of the FCA Group (Fiat, Alfa Romeo, Lancia / Chrysler and Jeep) which together have a market share of around 28%. The next best-selling brand is Volkswagen followed by Ford, Renault, Opel, Peugeot and Toyota. The Italian market continues to be characterized by small or medium-sized cars. In the first eight months of 2015, registrations in the A, B, and C segments claimed a share of 85.8%.

The company car market was strongly affected by the economic crisis. In particular registrations to companies fell by 678,000 units in 2007 up to 476,000 units in 2013. In 2014 there began a recovery in the Italian company cars market, which recorded an increase of 8.6%. This recovery has intensified in 2015. In the first eight months of the year, registrations to businesses have in fact increased by 12.57%, reaching 405,175 units. These break down as 101,744 units for short rental, 134,975 for long term contracts and 168,455 units registered directly by companies for their business purposes or by car dealers for resale as a car or as a demonstration car to sell with zero kilometres on the clock. In medium and large corporate fleets of the main acquisition mode is long-term rental. The main long-term rental suppliers are Arval, LeasePlan, ALD Automotive and Leasys. So, a slightly mixed picture, but on the whole, Italy seems to be moving in the right direction.

 

Authored by Giovanni Tortorici