Italy - Automotive SectorItaly - Automotive Sector
Italy is the fourth largest European automotive market after Germany, The United Kingdom and France, with 1.91 million new registered passenger vehicles sold in 2018, a 3% decrease over 2017. As concerns fuels, 51.2% of the vehicles sold were diesel, 35.5% gasoline, and 13.3% run on alternative fuels, 6.5% LPG, 4.5% hybrid, 2% CNG, 0.3% electric. The forecasts for 2019 are not positive either and the market is expected to shrink further by 3%. This is primarily due to the new eco-incentive system that awards the purchase of nonpolluting, but quite expensive, models while impacting negatively on more polluting, but cheaper, models.
Italy is one of the largest European markets for motorcycles and mopeds; in 2018 the local stock (mopeds, bikes and scooters) was 6,689,911 units, the largest in Europe. In 2018, the market grew over 7% compared to 2017.
The Italian automotive market
In 2018, 1.91 million new passenger vehicles were registered in Italy. Since the late 1990s, the Italian car market (statistics include passenger cars and light commercial vehicles - LCVs) has fluctuated between 1.4 million and 2.8 million units. After peaking in 2007 at over 2.7 million units, the market started a 6-year long decline, including double digit losses in 2008, 2011 and 2012, to its lowest volumes in the aftermath of the global financial crisis. In 2015 and 2016 the market recovered sharply with double digit increases, followed by a growth of nearly 7% in 2017, but remains far below pre-crisis volumes. In 2018, sales slightly declined again.
Light Commercial Vehicles sales typically make up around 8% of total car sales in Italy (185,000 units in 2018).
Foreign brands represented over 73% of the Italian automotive market. Major foreign competitors, all manufacturing abroad, were PSA and VW, respectively with 15.15% and 14.46% of the market. Ford had 6.8% of the market. Recently, the European branch of General Motors (GM), which operated through the Opel and Vauxhall brands, was sold to the French group PSA, thus ending GM presence in Italy. GM retained its long-established state-of-the-art GM Powertrain research center in Turin, which develops diesel engines, controls and propulsion systems for GM and for Opel and Vauxhall through supply contracts. This center of excellence, based in Turin, represents a strategic asset for GM globally and employs more than 600 engineers.
Italian manufacturers had a 26.4% market share of the passenger vehicles market. Italian- American manufacturer FCA (Fiat-Chrysler Automobiles) had a 26.1% market share: Fiat was the market leader with 16.93%, followed by the other group’s brands, Jeep 4.43%, Lancia/Chrysler, 2.54% and Alfa Romeo, 2.26%. FCA’s strong position in the local market was primarily due to its range of affordable city cars, e.g. the models Panda and Ypsilon.
FCA is the only auto manufacturer producing significant volumes of cars and light commercial vehicles in Italy. FCA models are primarily manufactured in Italy even though some of them are imported from Poland and Turkey. Jeep models are either imported from the United States, or more broadly from North America, or manufactured locally. The most successful Jeep model sold in Italy is the Renegade, which is produced in Melfi and exported to both the European and U.S. markets. About 97,000 Renegade units manufactured in Italy were sold in the U.S. in 2018.
Ferrari and Maserati models are manufactured in Italy too. These brands’ shares of the market are respectively, 0.02% and 0.14%. The remainder of the market is comprised by the Italian-Chinese J-V DR and the sports car manufacturer Lamborghini, part of the German group VW.
The market for new light commercial vehicles, i.e. under 3.5 tons, decreased by 6.1% last year, totaling over 181,000 units. The Italian market was the 5th in Europe after France, The UK, Germany and Spain. Local brands Fiat Professional, part of FCA, and Iveco, part of the CNH Group, and Piaggio had 39% of the entire Italian market. Fiat Professional and Iveco had also 37% of the LCVs market between 2.8 and 3.5 tons. Ford had 13%.
As concerns fuels, 91.8% of the LCVs is diesel, 5.1% alternative fuels, Gasoline/CNG 2.7%, Gasoline/LPG 1.8%, Electric 0.4%, Hybrid 0.2%, and 3% Gasoline. FCA has a 50% joint venture with the French PSA Group in LCVs: their plant is in Atessa.
Stock. The car stock in Italy totaled 39,018,170 vehicles in 2018, which are on average 11 years old (about 9 years for CNG/LPG vehicles and over 14 years for gasoline). Italy has one of the highest rates in Europe, due in large part to the lack of suitable public transport infrastructure.
Production. In 2018, the number of cars produced was around 671,000, 10% less than in 2017, 57% of them exported. LCVs production reached 325,000 units, 80% of them exported.
The Italian automotive industry is primarily concentrated in Turin, where the Italian HQ of FCA is based, and in the nearby Piedmont region.
Alternative Fuel Vehicles
Alternative fuel vehicles represent a sizable share of the Italian car market. Their 13.3% quota is divided into 6.5% LPG, 4.5% hybrid, 2% CNG, 0.3% electric vehicles. Over 87,000 hybrid and about 5,000 electric cars were sold in 2018. First data referring to 2019 shows possible further increases.
Italy has for many years been a strong market for both LPG and CNG vehicles. Historically, the FCA Group has not been particularly focused on electric vehicles but has opted for research and development in technologies related to LPG and CNG vehicles. Recently they seem to focus more on the electrification of their models possibly through agreements with other manufacturers.
In recent years, electric and especially hybrid cars grew in the Italian market. These vehicles are in general imported, with alternative fuel vehicles from the United States primarily manufactured by Tesla. While Tesla sales numbers are still low, 464 units in 2018 compared to 482 in 2017, affluent consumers are showing a growing interest in Tesla’s vehicles. Tesla’s superchargers network in Italy is expanding with 35 stations so far Italy-wide, with 15 in projection. The network has no presence now in either Sardinia and Sicily. Developing the charging network could boots Tesla’s sales.
There are many projects focused on extending the recharging network for electric vehicles. Enel, the largest Italian utility and provider of electric energy, announced in 2017 a $300 million project for installing 14,000 charging stations for electric vehicles.
The Italian alternative fuel vehicles market is composed by both new vehicles and used vehicles, retrofitted through aftermarket processes that retrofit gasoline vehicles to Gasoline/LPG and Gasoline/CNG. Many used vehicles, especially the more powerful using gasoline can be retrofitted to LPG/CNG to keep their operating costs affordable. In the last 15 years, LPG retrofitting has been done on more than 2 million units, whereas CNG retrofitting has exceeded more than 400,000 units. Actual costs depend upon the technology of the vehicle being retrofitted. The importance of both the CNG and LPG markets allows Italian components manufacturers to be among the leaders in these specific market niches. Companies such as Landi Renzo and BRC are well known worldwide and almost 80% of revenues of the sector’s companies are generated abroad. A network of over 6,000 car repair shops throughout Italy handles retrofitting.
There are currently 3.35 million alternative fuel vehicles registered in Italy, or 8.6% of the overall vehicles stock: 2.4 million of them are LPG, 945,000 are CNG and about 260,000 are hybrid and electric.
It is difficult to determine which part of the Italian alternative fuels market is composed of vehicles manufactured in Italy or by imported vehicles. In fact, models by FCA, are usually fitted at the factory - Gasoline to Gasoline/LPG or Gasoline to Gasoline/CNG - so the value depends on where the vehicle is manufactured, if in Italy or abroad.
Alternative fuel vehicles can rely on a widespread distribution network, with thousands of LPG and CNG refilling stations. While Italy has the largest network of CNG refilling stations in Europe, the distribution network for both LPG and CNG is quite underdeveloped in Southern Italy, Sardinia and Sicily. FCA, Iveco, part of CNH Industrial and Snam, which owns part of the natural gas transportation network, plan to develop 2,200 CNG refilling stations by 2026.
It is also interesting to note that in the heavy trucks market (25,000 units sold in 2018, 5% more than in 2017), CNG and LNG are increasingly expanding in the market. While numbers are still low, their market quota in 2018 was 4.5%, compared to 2.4% in 2017. Incentives and an improved distribution network are basic to guarantee the development of these alternatives. In fact, only 39 LNG filling stations were operating in Italy in Feb. 2019, compared to just 15 in 2017.
Incentives: a new regulation issued in 2019 and valid through 2021 supports both private recharging stations and the purchase of zero or low emissions electric and hybrid passenger vehicles plus no ownership tax for 5 years and discounts for the following years. At the same time, this regulation is penalizing many models which are more polluting but by far cheaper than the virtuous ones, in particular than the electric models. Besides that, some insurance companies offer discounted insurance premiums to electric vehicles owners.
In 2018, according to data released by ANFIA, which stands for Italian Association of the Automotive Industry and by ISTAT, the Italian National Institute of Statistics, the Italian parts and components manufacturers, among the most important in the world, exported products worth $24 billion worldwide. Italian firms imported $18 billion of automotive parts and components, registering a growth of more than $1.4 billion. The United States was the 7th export market for the Italian automotive component’s manufacturers, worth about $1.1 billion. U.S. exports of automotive components to Italy have grown sharply in the last years. In 2018, U.S. products accounted for more than 4% of the total Italian imports of automotive components at a value of around $720 million.
U.S. automotive component manufacturers have a significant presence in Italy where they primarily manufacture parts used in vehicles that are then exported to other markets. For example, the American firm Alcoa maintains their Advanced Transportation Systems (AATS) in Modena and has partnered with Ferrari to bring advanced aluminum structural technology and performance to their Gran Turismo vehicles. Other U.S. automotive components manufacturers have a strong manufacturing presence in Italy, including Exide, Federal Mogul and PPG.
Italy is one of the largest European markets for motorcycles and mopeds. In 2018, the local stock (mopeds under 50cc plus bikes and scooters over 50 cc.) was 6,689,911 units, by far the largest in Europe.
In 2018, the market grew over 7% compared to 2017. Total sales were 219,465 units. Motorbike sales grew about 13% to 92,991 units while scooters - which represent 58% of the market - recorded a 3.7% growth, to 126,474 registrations. Motorcycles sales came back to the ‘90s levels after the strong crisis that hit the market after 2008. The two categories that sold most were ‘naked’ and ‘enduro’, which jointly make 71% of the market, a 2% increase over 2017. The so-called ‘tourism’ category was the third best sold category.
Motorcycles registrations increased in most EU countries during the first 3 months of 2019 and reached 244,991 units. This represents an increase of 19.2% compared to the same period of 2018. With 54,826 units, a 18.7% increase on a year-on-year basis, Italy remains the largest European motorcycle market, followed by Germany, 44,450 motorcycles, +23.3%, France, 43,942 motorcycles, +20%, Spain, 37,255 motorcycles, +20.5% and the UK, 25,913 motorcycles, +10.3%.
Harley-Davidson (H-D) is the most important U.S. brand operating in the Italian market and many local tuners use H-D bikes to develop their customized models. The market for Harley-Davidson slightly slowed down in the first four-months of 2019, at 1,357 units. In the customized niche market, Harley had a 59.3% share in the same period, Ducati ranked second with a share of 11.4%, and Indian got 4.5% of the market. In the tourer market, H-D got 55% of the market and BMW ranked second with 32.7%.
The European moped market reached 52,715 units during the first 3 months of 2019. This represents an increase of about 30% compared to the registration levels of the same period in 2018 (40,522 units). The largest markets for mopeds in Europe were France, 17,997 units, Netherlands, 13,040 units, Belgium, 4,683 units, Spain, 3,993 units and Italy, 3,846 units.
Combined registrations of electric mopeds, motorcycles and quadricycles reached 14,251 units during the first three months of 2019. This represents a substantial increase of 71% compared to the first three months of 2018, 8,326 units.
Most of the electric L-category vehicles registered in the first three months of 2019 are mopeds (11,258), followed by motorcycles (2,295). The largest European markets in terms of volume were France, where combined registrations of mopeds, motorcycles and quadricycles totaled 4,407 units, +105% on a year-on-year basis, followed by Belgium, 2,627 vehicles, +78.5%, Netherlands, 2,598 vehicles, +52.6%, Spain, 1,632 vehicles, +28% and Italy, 901 vehicles, +49,2%.
The upcoming new Euro 5 standards, to be enforced in 2020, will apply to the new models sold since next year.
In the first semester of 2018, 790 electric scooters were registered in Italy, a 73% increase over 2017. Piaggio is the leading Italian manufacturer of electric bikes, as well as the largest European two- and three-wheeler manufacturer, producing both the hybrid MP3 scooter and an electric version of its 4 wheelers light commercial vehicle ‘Porter’. A recent law approved by the Italian Parliament provides grants to purchase new hybrid or electric two-wheelers with power up to 11 kw when the buyer scraps a two-wheeler Euro 0, 1 or 2: funds are currently allocated but only for 2019, while for 2020 and 2021, the funds are conditional on the availability of resources. Tax incentives are granted also for installing private recharging structures.
Italy hosts the most important show in the world in this sector. EICMA, which stands for ‘International Motorcycle and Accessories Exhibition’, is annually held in Milan and next edition is scheduled on Nov. 5-11, 2019. EICMA is the meeting point for all the companies interested in displaying new models and products and attracts hundreds of thousands of visitors from all over the world. In 2018, the 76th edition had almost 1,300 exhibitors, 52% of them coming from abroad. CS Italy is ready to support the U.S. companies wanting to participate in the 2019 edition, which is expected to be even larger as there are no other shows overlapping with EICMA as it was in 2018 with the Cologne Intermot show. In 2018, Harley Davidson displayed at EICMA the final version of the Live Wire electric model and announced additional electric models for the next future to get the leadership in the sector.
Italy also hosts the Motor Bike Expo, organized in Verona and devoted to the custom sector. The 2019 edition had 170.000 visitors.
Italy is an interesting market for the alternative fuels’ technologies. The US has a competitive advantage in the use of alternative fuels, particularly in the public transportation sector, and opportunities exist for U.S. products in Italy. Besides this, the Italian market offers opportunities for U.S. companies active in the following sub-sectors:
Diagnostic equipment needed to maintain gasoline engines converted to dual fuel (gasoline + LPG and gasoline plus CNG);
Refueling stations, including parts and components. The increasing number of LPG and CNG vehicles requires suitable refueling stations allowing for self-service refueling. Self-service is still very rare in Italy and was prohibited until recently due to safety reasons;
Electric vehicles (both cars and two and three wheelers). Besides consumer interest in models like Tesla, there is interest in the Italian market for the two and three wheelers electric vehicles, e.g. from police forces looking for vehicles particularly fit for silent, reliable and economic patrolling.
Accessories, apparel, equipment and tuning for the motorcycle sector.
Oil & non-Oil - S&TC: October 23-24, 2019, Rome, Italy. Focused on car wash, alternative fuels, downstream, service stations (13rd edition)
EICMA: November 5-10, 2019, Milan, Italy. The major international motorcycle exhibition (77th edition). EICMA is the largest motorcycle event in the world. CS will provide strong support to U.S. companies interested in exhibiting and meeting new business partners during this event.
Motor Bike Expo: January 16-19, 2020, Verona, Italy. An international motorcycle show (12th edition) devoted to the tuning world.
Automotive Dealer Day: May 19-21 2020, Verona, Italy. An international event (18th edition) focused on the automotive distribution industry.
MotoDays 2020: March 5-8, 2020, Rome, Italy. A motorcycle show which draws its audience mostly from Central and Southern Italy.
ACI - Automobile Club of Italy, www.aci.it/
ANCMA - Italian Association of Cycles, Motorcycles and Accessories, www.ancma.it
ANFIA - Italian Association of the Automotive Industry, www.en.anfia.it/
UNRAE - Association of foreign car makers operating in Italy, www.unrae.it/
U.S. Commercial Service Contact:
Mr. Andrea Rosa, Commercial Specialist
U.S. Commercial Service, U.S. Consulate Milan
Italy Automotive Trade Development and Promotion