Lacking state support puts the brakes on ‘green’ cars

The ecology-orientated spirit of most Italians is often directly proportional to how many state incentives are given when purchasing new cars. The boom of biofuel and hybrid cars, which took off in 2009 and which de facto kept the market buoyant, stemmed from the flood of state contributions (which the Treasury raked back again fully with the ensuing big tax and VAT revenues).

The party is just about over now, with the cut-off date of 28 February being the last day for benefiting from stand-in promotions offered independently by the several car manufacturers.

Gas and incentives

Italian minister Scajola has clearly and adamantly stated that there are no new incentives in the pipeline. There remains only a feeble hope linked to the European decisions in Brussels; but if they were to be restored, they would not be as generous as in latter years, and would surely be linked to CO2 emissions, as has been the case in other European countries. So we can easily say goodbye to three-figure rises in sales of gas biofuel cars and also a drop in sales of hybrid cars. 

The market

In the first two months of this year, car manufacturers will be offering discounts to make up at least partly for the lost incentives. But after that fateful date, the taps will be turned off.

The statement by Roberto Matteucci, Managing Director of General Motors Italy, sums up the general picture: “We would have preferred a gradual reduction of the incentives but that won’t be the case. We will keep up our special offer until the end of February with 1,500 Euro for demolition and 1,500 for the LPG biofuel cars, but we won’t be able to bear further costs. We have done this as a temporary solution pending the Government’s decision but in any case, it is over now”. 

So the face of the market is poised for further, and far-reaching, change.

“Without incentives, Matteucci went on, LPG will return to normal levels. It grew by 327% last year with a market share over 15% but that trend will end. The prices of petrol and diesel will go up again. Fortunately for us, we have a new range of engines with lower emissions and fuel consumption”.

The same applies to cars run on methane, almost all Fiat ranges: the forecast is for a physiological drop, much like the one for LPG. 

Electric Business

Another big question involves electric cars. All manufacturers are working to bring electric cars onto the streets as soon as possible. Just after the summer, we will see the first Mitsubishi i-MiEV on the market followed closely by Peugeot’s iOn and Citroen’s C-Zero, made on the same assembly line and ready for marketing in autumn 2010. However, considering the very high purchase cost and the chronic lack of facilities for recharging, the launch in Italy could be minimal or even cancelled altogether.

by Marina Terpolilli – Il Sole 24 Ore (Monday)