Italian new passenger car sales plunged 65.1pc to 88,801 units in August compared with the prior month, according to data released by the Associazione Nazionale Filiera Industria Autombilistica (ANFIA) on September 2.
Akin to developments in the French automotive industry last month, new passenger car registrations plummeted in August compared with the previous month as Italians took their traditional annual vacations.
However, new car registrations in Italy only edged 0.43pc lower compared with August 2019 as consumers held back on their purchases until the government launched its own stimulus program on August 1 to incentivize new car sales.
The Italian government stimulus program provides €3,500 for scrapping vehicles that are more than 10 years old when purchasing a new Euro 6 model vehicle with CO2 emissions of up to 110g/km and priced up to €40,000.
Car dealers are obliged to contribute up to €2,000 towards the sales incentive, while the government is also offering incentives of up to €8,000 for consumers purchasing zero-emission vehicles.
Moreover, the Italian government increased the scale of the car sales incentive stimulus program from €150mn to €450mn to encourage sales of state-of-the-art combustion engine cars as well as electric and hybrid vehicles.
Although Italy’s stimulus program will no doubt drive car sales in the short term, Davis Index calculates that this enlarged program may only support the purchase of an additional 130,000 units.
Thereafter, the country’s automotive industry will have to weather the storm of COVID-19-related economic uncertainty and relatively low consumer confidence impacting demand for large ticket items.