Increasingly expensive cars and falling volumes

Cars cost more and about 300,000 Italians who cannot afford them have left the market. Some have turned to second-hand cars, the Cuba effect, and others have moved the replacement forward, which is what it is all about, because the one they have still works fine, even without the latest Bluetooth connection.

Before Covid, 1.9 million cars were registered in Italy and two out of five, or 800,000, had a price list below EUR 20,000. Last year it was one in five, or 300,000 units, and the market absorbed a total of 1.6 million. In practice, half a million fewer sales in the low end pulled the market down by 300 thousand units, while another 200 thousand customers moved to more expensive models. The over EUR 35,000 price range sold 280,000 units in 2019 and doubled last year, despite a 16 per cent lower market.

The Fleet&Mobility Study Centre's value analysis shows how the average price paid by Italians, net of discounts and incentives, has risen from EUR 21,000 in 2019 to almost EUR 29,000 in 2023. The operation on price lists and discounts may have squeezed volumes by 300,000 units, so much so that many people shouted that the market was in crisis, but in reality the cost of registering new cars jumped from 40 billion before Covid to 46 billion last year. It takes a lot of nerve to call a market that invoices 15% more in crisis.

The simple truth is that manufacturers have preferred to sell more expensive cars where they earn more, and as is written in the economics textbooks, volumes have plummeted. They have wanted this for a long time: who wouldn't want to sell less and earn more? Why now? Because they cannot give customers as many thermal cars as they ask for. If they had done so, they would have been clubbed by the Commission's fines, which required at least one in ten cars to be electric. From next year, two out of ten. Volumes will drop again.