Sales of Supercars in Italy have dropped 80% in the last 5 years and car sales look set to drop to the lowest point since 1966.
We all know the Eurozone is finally paying the price for stitching together powerhouse economies and basket case ones with the same blunt fiscal tools to control their economies. And even Italy – once a major Southern European economy – seems to be as big a basket case as Greece and Cyprus if you start to dig a bit.
Back in 2008, Italy had a supercar market of around 2,000 cars a year, but that has now shrunk by 80 per cent to just 400 cars a year (from a country with a population similar to the UK’s, where Ferrari alone sold nearly 700 cars in 2012) and car sales in general are falling dramatically.
In fact, it’s expected that cars sales in Italy in 2013 could fall to their lowest level since 1966 as a combination of the Euro crisis, a political crisis that effectively sees Italy without a proper government and austerity measures that have both increased taxation and made buyers of expensive cars shun new purchases as the authorities vigorously pursue owners of high-end cars for proof they bought it with legitimate funds, crush Italy’s economy.
Particularly hard hit is Fiat, which makes 56 per cent of its sales in Italy (or did), which made a loss of €700 million in 2012 and has seen its value cut from €22 billion in 2007 to just €5.5 billion today.
As a result, Fiat is turning to countries like Germany to try and make sales and is discounting deeply to take a market share, selling its cars in Germany at an average 16.5 per cent discount. But even that may not help, with Germany’s car sales falling by 17 per cent in March as even their powerhouse economy feels the effects of the Eurozone crisis.
Fiat does have the advantage of having Chrysler – which is making profits – to help through the crisis, and is planning to produce more Chryslers in Italy and employ unused production facilities as export hubs for their premium brands.
But with car sales in Italy likely to be only half those in the UK – it’s estimated Italians will buy just 1.1 million new cars in 2013 – and just half what they were just 6 years ago, the Italian car industry – which accounts for 12 per cent of Italy’s GDP – looks to be in terminal decline with factories unused and dealerships closing. Sadly, there is no quick fix for a country mired in political problems and deep in the Eurozone crisis.
And we though the economy was tough in the UK.