Italian Prime Minister Silvio Berlusconi has said that he is ready to help the auto industry beyond the end of this year, implying that Italian government incentives for new car purchase could be extended.
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Questioned on Italian TV about Fiat CEO Sergio Marchionne’s warnings over ending incentives this year, Berlusconi said: “If, when they expire at the end of the year it is necessary or helpful, then the government will not shrink from this.”
Marchionne has said that he favours phasing out incentives over two years and warned that without them, Italian car sales would fall back to under 2m units next year.
JD Power analyst Pete Kelly told just-auto today that his organisation forecasts an Italian car market of 2.1m units this year, down 3% on 2008, with an assumption of 2m units for 2009 subject to some uncertainty over what happens in Italy.
“Our 2m unit projection for 2010 is not assuming full renewal,” he said.
“If the incentive is fully renewed then the market could go as high as 2.1m units again. If the incentive ends at the end of this year, then the market could fall to 1.9m units.”
European auto industry executives – including Marchionne and Renault’s Carlos Ghosn – have warned that the European car market will see a substantial drop in 2010 if the support from national government scrappage incentives is suddenly switched off.
However, analysts caution that the support to the car market from scrappage incentives will diminish over time and that the industry’s prospects are ultimately tied to underlying economic recovery.
Dave Leggett
Dave Leggett speaks to Pete Kelly
