In Italy, the Car Market is Growing, Contrasting With the Rest of Europe

Trade and Economics - November 22, 2022

Even in October, the growth of the automotive market that began in recent months continues and is constant

After the good signs of last summer, the trend of new car registrations in Italy seems to be on the rise, also driven by long-term rentals, which now represent almost a quarter of the national market. In October, growth stood at 14.6% compared to previous months and is higher than that of many other European countries.

The long-term rental formula, now widely used throughout the continent, has proved extremely relevant in the recovery of the Italian car market by encouraging new purchases. New registrations have now reached 115,827 units with a strong increase compared to the previous month. This growth, if confirmed also in the coming months, could drive the whole sector which, in the last 10 months of 2022, however, recorded 175,000 fewer registrations than in the same period of the previous year with a fall of 13.8%.

What weighed on the automobile market, not only in Italy but globally, was the fragility in the global geo-political scenario that inevitably affected the constructive capacities of the main industrialized countries affected by the increasingly disabling shortage of fundamental components and raw materials necessary to maintain an adequate volume of production. These problems could lead to an unprecedented reduction in sales in the automotive sector, even exceeding the historical low recorded so far in the year 2013.

Analysts estimate that, despite the growth recorded in the last month, defined by some as physiological after a period of severe crisis, the sales volumes of cars are however destined to suffer from the technical recession already started in some European countries and which could worsen in 2023. Insiders are also worried about the agreement, which took place in recent weeks in the European offices, which define the stop to sales of internal combustion cars in 2035 and which, therefore, provides for a substantial adjustment of the production methods and a consequent downsizing of the workforce currently employed.

Despite the growth figures, however encouraging, the current production and sale of new cars is still not enough to replace the Italian car fleet, currently considered the oldest in Europe and which, at this rate, will hardly be able to adapt the European standards, necessary for the electricity transition, expected in the coming years. It will be essential for the Italian car market to return to reasonable levels in a short time and, to do so, it will have to confirm the growth recorded in recent months and, if possible, further improve the data.

The supply adjustment, with the manufacturing companies better able to satisfy demand, has helped the Italian car market, so far to recover and record excellent growth figures but will have to remain stable for a long time to return to levels acceptable in view of the new economic and technological challenges of the next 15 years, for which the companies must be absolutely ready.

The President of UNRAE (National Union of Foreign Motor Vehicle Representatives), Michele Crisci, says he is willing to collaborate with the new Italian government, which has just taken office, to tackle this difficult transaction in the international automotive sector and believes that the process will require priority interventions focused on 3 points milestones concerning the renewal of the old Italian car fleet, with the production and sale of low-emission or fully electric cars, a modernization of the infrastructures linked to public recharges for electric and hydrogen mobility, throughout the national territory, which incentivize the purchase of zero-emission cars and finally, a substantial revision of private and corporate taxation to facilitate the purchase of new cars.