It’s been discussed and rumoured for weeks, if not months, but it seems that the Italian government is getting closer to announcing measures to support its economy and automotive sector in the wake of the Covid-19 crisis.
According to a report in the New York Times the Italian government is preparing to announce a €20 billion stimulus package targeted at the automotive sector and in aiding families with tax relief. The package is expected to be approved by early August.
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About €1 billion is to be set aside to boost scrappage incentives for ICE and electrified vehicles. Whether the €1 billion set aside for auto adds up to the €3,500 incentive for Euro 6 vehicles reported on in late June remains to be seen. Like the French scheme, the Italian proposal also allows for the purchase of gasoline or diesel cars once the more than 10-year-old vehicle has been traded. The French scheme led to a pronounced uptick in vehicle sales in June.
Light vehicle sales in Italy have been hit hard by the Covid-19 pandemic in a market already pressured before the onset of the coronavirus. Sales fell 84% in March, 97% in April, 48% in May and 23% in June. For the year, and with the assumption that government support would be forthcoming, GlobalData forecasts a 25% fall to 1.56 million light vehicles.
The seeming confirmation of Italy’s support for the automotive market leaves the UK as the only Big Five market not offering direct support for the automotive market. An announcement of an Italian scheme will provide more ammunition for the UK’s SMMT to increase pressure on the government to intervene in the market.
– By Calum MacRae
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