ExpertEye European Automotive Report Q2 2016 | Page 21

economy in general. A fall in unemployment has been helped by the three-year social Top 10 Makes contribution exemption for new permanent hires and there is also good news for Italian consumers as the proposed 2016 increase in VAT to 24% from 22% has been delayed to 2017 due to the rising economy but VAT is still planned to hit 25% in 2018 unless Italy hits its budget targets. New car sales have risen 19.2% YTD leaving Italy only 143,000 cars behind France. Should the economy continue to hit its targets, resulting in further postponements of a VAT increase, 2017 could also see double digit growth with the potential for Italy to hit 2.3 million new car sales and overtake the more sluggish French market in 2018 before falling back towards the end of the decade. The rush to avoid the VAT increase has also seen LCV sales shoot up, rising to 27.6% in June and 31.3% YTD. Domestic vehicle sales still dominate the Italian market with the Fiat Panda being the number one selling vehicle followed by the Median M arket Average AUDI Italians. Whilst SUVs remain popular in Italy the more practically sized medium premium models have the strongest RVs whilst small SUVs have dropped back a little in the last quarter in part due to the increased supply into the market place. With the economy back in the black and unemployment falling forecast RVs have continued to recover, rising 6 percentage points in the last year. Assuming a new banking crisis can be avoided we believe RVs may still rise a further couple of percentage points over the next year or two to bring values more in line with the other major used car markets. However Italy has a track record of volatility and there is some risk that RVs could also fall by 4-5 percentage points by 2018. European Automotive Report - 2016 Quarter 2 44.7 +3.0% 43.3 +1.0% +2.5% -3.0% JAGUAR 41.3 +3.8% JEEP 40.8 +2.8% 39.2 +2.3% BM W 40.9 VOLKSWAGEN 39.4 HONDA 38.9 M ASERATI ALFA ROM EO 38.5 Top 10 Segments Lancia Ypsilon, and then Fiat’s 500L, 500, 500X and Punto. The premium brands continue to enjoy the strongest RVs thanks to the image conscious Months 44.0 M INI last 3 RV% 36.9 LAND ROVER % Change Median M arket Average C2 M edium Premium J3 Premium SUV J2 Compac t SUV J1 Small SUV D2 Large Premium -0.5% +0.5% +1.8% +7.9% % Change last 3 RV% Months 42.7 +4.6% 36.9 42.6 41.8 40.4 +1.0% +0.5% +2.8% -1.8% 40.2 +0.2% C1 M edium 39.0 +1.6% E1 Exec utive 37.5 J4 Luxury