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Summary and extracts

1 Market Overview

1.1 Definition and presentation

Car dealerships are market participants who are engaged in the purchase and resale of automobiles and motor vehicles, as well as their individual components, with the aim of making a profit. Car dealers typically generate income from the following activities:

  • Sale of new vehicles: the dealer purchases vehicles from manufacturers and sells them to end customers, such as businesses or individuals
  • Used vehicle sales: the dealer purchases used vehicles from individuals or rental companies and resells them on the market
  • Mobility services: today, dealers are beginning to provide customers with a range of traditional sales products, including long-term and short-term rentals. In most cases they purchase cars from rental companies, and the 11 Corporate Analysis of the car dealership provides for these services (Rent to Rent Business). At the end of the rental period, the vehicles are offered for sale
  • Service and spare parts: this business includes the maintenance of cars in the workshop. In addition, the dealer has spare parts in stock that he can also sell to other dealers: in particular, some parts are original OEM and unaffiliated dealers can only get them from an affiliated dealer. Therefore, the price of original parts is increased by the dealers who resell them
  • Financial service: starting in the 1970s, car dealers began to cooperate with banks or automakers to offer loans to end customers for car purchases. This opened up a new source of income for dealers to have a specific line of credit from OEMs that dealers use to order new cars based on consumer and manufacturer requests

In 2022 the global automotive market reached a total value of 2.81 trillion dollars and is expected to grow at a compound annual rate (CAGR) of 4.42 percent during the period 2022-2030. As for the market of automobiles and light vehicles, in 2022 the global market is estimated at 1.74 trillion dollars. During the period 2022-2030, a compound annual growth rate (CAGR) of 7.6 percent, under which the market could reach a total value of 3.0 trillion dollars.

This study focuses on the specific car dealer market in Italy, analyzing consumer trends, competitive dynamics, and growth prospects for the industry. For information on related markets, such as electric cars, see the specific studies available in the Businesscoot catalog.

1.2 The global market

in ****, the global automotive market reached a total value of $*.** trillion. A compound annual growth rate (***) of *.**% is projected for the period ****-**** under which the world market could reach a total value of $*.** trillion at the end of the period

Automotive Market World, ****-****, in trillions of dollars Zionamarketresearch

The automotive-only market segment reached a value of $*.** trillion in ****. The projected compound annual growth rate (***) for this segment over the ****-**** period is higher than that of the more general automotive market. In fact, for the automotive segment the projected CAGR is *.* percent, and by the end of the period the global market could reach a total value of $*.* trillion. Automobile market World, ****-****, in trillions of dollars Precedenceresearch a list of the ** best-selling automobiles globally in **** is offered below: MODEL UNITS SOLD Toyota Corolla *.***.*** Toyota Rav* ***.*** Ford F-Series ***.*** Tesla Model Y ***.*** Toyota Camry ***.*** Honda CR-V ***.*** Tesla Model * ***.*** Chevy Silverado ***.*** Toyota Hilux ***.*** Hyundai Tucson ***.***

1.3 The Italian market

Between **** and ****, the total turnover of enterprises devoted to the manufacture of motor vehicles appears to be declining. During the period, total turnover decreased from **.** billion euros to **.** billion euros, thus registering a contraction of **.* percent. The decline appears to be constant between **** and **** (***) while between **** and **** there is a recovery in the industry, with total turnover increasing by **.* percent.

Total turnover of motor vehicle manufacturing enterprises Italy, ****-****, in billion euros Istat

In contrast to the manufacturing sector, the total turnover of automotive trade enterprises appears to be growing between **** and ****. During the period analyzed, total turnover grew from **.** billion euros to **.** billion euros, representing a growth of *.* percent. However, while there is a *.* percent growth between **** and ****, between **** and ****, mainly due to closures and restrictions brought about by the pandemic outbreak, total turnover drops by **.* percent. In ****, however, the industry seems to be showing signs of recovery, with year-on-year growth of **.* percent, with the figure remaining, however, lower than that recorded in ****. Total turnover of passenger car and light motor vehicle trade enterprises Italy, ****-****, in billion euros Istat

1.4 Import - Export

In order to analyze Italy's trade flows with regard to the automotive sector, HS code **** "Motor vehicles and other motor vehicles designed for the transportation of persons" is taken into consideration.

By analyzing trade flows in the period ****-****, it is possible to highlight the positioning of Italy as a net importer. In fact, during the period considered, the export coverage index, determined by the ratio of exports to imports multiplied by ***, maintains a value always below *** percent. Regarding exports, between **** and ****, the value of Italian exports is found to be decreasing, from $**.* billion to $**.* billion (***). At the same time, the value of imports is also declining: between **** and ****, there is a **.*% contraction. However, it is possible to show a recovery of imports between **** and ****: while between **** and **** there is a contraction of **.*%, between **** and **** the growth is **.*%.

Import - export motor vehicles (***) Italy, ****-****, in billions of euros **.*%, t UncoAutomtrade

Analyzing specifically the trade flow out of Italy, the United States is Italy's main trading partner collecting **.*% of total exports. This is followed by Germany (***), and together account for **.*% of Italian exports. Main destination countries of atuovehicle exports Italy, ****, % Uncomtrade Finally, analyzing trade inflows, Germany is the main country of ...

1.5 The consequences of the Russian-Ukrainian conflict

The outbreak of the Russian-Ukrainian conflict in February **** led to a general increase in price indexes, among other things. Relative to the automotive sector, between January **** and December ****, the consumer price index for car purchases increased by **.* points to ***.* points. This means that over a period of ** months, average prices for buying a car grew by **.* percent. Compared to ****, average prices grew by **.*%.

Consumer price index for automobile purchases Italy, ****-****, base ****=*** Istat

The increase in consumer prices is merely a reflection of the increase in production costs. Analyzing the producer price index for the manufacture of motor vehicles, an increase of *.* points can be shown between January **** and November ****, equivalent to an increase in production costs of *.* percent in ** months. Compared to ****, production costs increased by an average of **.* percent. Producer price index for motor vehicle manufacturing Italy, ****-****, base ****=*** Istat Finally, considering the import price index for the manufacture of motor vehicles, it is possible to show an increase in prices here as well. Between January **** and October ****, the index shows an increase of **.* points, representing a cost increase of **.* percent. Compared to ****, the increase averages **.* percent Import price index for the manufacture of motor vehicles Italy, ****-****, base ...

2 Demand analysis

2.1 Demand in Italy

To analyze the demand for cars in Italy, the number of registrations, the types of cars registered, the average household expenditure on purchase and the number of cars owned by households are taken into account.

Between **** and ****, the total number of cars registered annually in Italy is shrinking. During the period analyzed, the number of registrations fell from *.** million to *.** million, marking a **.* percent decline. The decline is mainly concentrated between **** and **** (***). Motor vehicle registrations Italy, ****-****, in millions Unrae Considering then the different types of car fueling, in **** more than */* of total registered cars (***) cars. Plug-in hybrid and full electric cars account for *.*% and *.*% of the total, respectively, while CNG cars are just *.*% of the total number of cars registered in ****. Car registrations, breakdown by fuel type Italy, ****, % Unrae With regard to Italian households' spending on car purchases, there is a sharp decline in average monthly spending between **** and ****. During the period analyzed, average household spending fell from **.** euros per maese to almost half that, **.** euros per month, thus registering a contraction of **.* percent. The decline appears to be constant throughout the entire period and is particularly concentrated between **** and ****, with a negative annual change of **.* percent.

Average monthly household ...

2.2 Demand drivers

In order to analyze the drivers of automobile demand in Italy, the average monthly expenditure according to professional position, the periodicity with which Italians change their cars, and the main reasons expressed regarding the new purchase are considered.

Considering the average monthly expenditure on transportation purchases, it is possible to identify a positive correlation between expenditure and professional position. In fact, as shown in the graph below the average monthly expenditure tends to increase as professional position turns out to be more relevant. Entrepreneurs and freelancers spend an average of ***.** euros per month while among managers and executives spending stands at ***.** euros per month. This is followed by blue-collar workers with **.** euros per month and those who have retired from work with **.** euros per month. Finally, job seekers spend an average of **.** euros per month, accounting for **.* percent of the spending by entrepreneurs and freelancers.

Average monthly expenditure on the purchase of transportation, breakdown by employment status Italy, ****, in euros Istat

Then considering the periodicity of car purchase, **% of Italians make a new car purchase every *-* years, while **% resort to buying every *-* years. **.*% of the population changes cars every *-* years while just *.*% change their cars every * years at ...

2.3 Geographical distribution of demand

In order to visualize the geographic distribution of automobile demand in Italy, two maps were created with the distribution in each Italian macro-region of registrations and average monthly household expenditure on automobile purchases.

Starting with registrations, more than ** percent of total registrations made in **** are concentrated in the North of the country. Specifically, in the Northeast **.* percent of total cars were registered while in the Northwest **.* percent. This is followed by the Center and the South, where registrations were **.*% and **.*% of the total, respectively. Finally, the Islands concentrated just *.*% of total registrations.

Then analyzing the average monthly household spending on car purchases, the North of the country once again records the highest values. In the Northeast, households spend an average of **.** euros per month on car purchases, while in the Northwest, spending drops slightly: **.** euros per month. This is followed by the Center and the Islands, where average household spending stands at **.** euros and **.** euros, respectively. Finally, the South has the lowest spending, at just **.** euros per month, accounting for **.* percent of the spending recorded in the Northeast.

2.4 New demand trends

Online car sales is a relatively recent phenomenon that is gaining more and more popularity. With the advent of the Internet and digital technologies, buying cars through online platforms has become a convenient option for both sellers and buyers. One of the greatest advantages of selling cars online is convenience. Buyers can search and compare cars from home, without the need to physically visit multiple dealerships. Ondealers are adapting their strategies to include online sales, using digital platforms to expand their audience and offer a more flexible buying experience(***)

In ****, the online car sales market reached a total value of $***.* billion. Over the period ****-****, a compound annual growth rate (***) of *.**% is expected under which the global online car sales market could reach a value of $***.* billion by the end of the period.

Online car sales market World, ****-****, in billions of dollars IMARCGroup

3 Market structure

3.1 The market structure

to determine the structure of the car dealer market in Italy, enterprises under Ateco Code **.** "Trade in passenger cars and light motor vehicles" are analyzed. In particular, the number of active enterprises, the number of employees in enterprises and the legal form of activities are highlighted.

Number of enterprises

Between **** and ****, the total number of active enterprises in the motor vehicle trade appears to be growing. During the period analyzed, the number of active enterprises increased from **,*** to **,***, marking a growth of **.* percent. The growth appears to be constant throughout the period, and the outbreak of the pandemic in **** does not seem to have a significant impact on the trend in the number of enterprises (***).

Enterprises under Ateco Code **.**.* "Trade in passenger cars and light motor vehicles" Italy, ****-****, in thousands Istat

Employees The number of employees in the industry also appears to be growing. Between **** and ****, the total number of employees in active enterprises grew by *.* percent, from **,*** to **,***. Again, growth appears to be constant throughout the entire period, with the sole exception of ****, a year during which there is a contraction in the number of employees of *.* percent compared to ****. However, in **** the decline recorded in **** is completely absorbed ...

3.2 The value chain

The stage related to the choice of financing or leasing formula is crucial because it concerns the facilitation of vehicle purchase by customers, making the process accessible and financially manageable. An in-depth discussion related to this stage is offered below:

Detailed aspects of financing

Types of loans: car purchase loans can vary widely in terms of duration, interest rate, and amount that can be financed. Some loans may have fixed or variable interest rates and durations ranging from a few years up to *-* years. Down Payment and Interest Rate: a higher initial payment can reduce the total loan amount and potentially lower the interest rate. Interest rates can vary depending on the customer's credit history and other financial factors. Credit check process: dealers, through their financial partners, usually perform credit checks to assess the customer's creditworthiness, which can affect both the likelihood of obtaining a loan and the terms of the loan.

Detailed aspects of leasing

Lease structure: lease agreements can include various terms, such as lease term, annual mileage limits, purchase options at the end of the lease, and liability for wear and tear and damage. Initial and final costs: there are often initial costs in leasing, such as ...

3.3 The main actors

Manufacturers

Volkswagen Group Italia s.p.a: is the Italian subsidiary of the Volkswagen Group and has as its main purpose the importation of Volkswagen, Audi, SEAT, CUPRA, Škoda and Volkswagen Commercial Vehicles cars, spare parts and accessories, the marketing and servicing of the products of the brands represented, while ensuring a level of service that guarantees a high degree of customer satisfaction and lasting business solidity of its own and of the contractual Partners of the Organizational Network.

Groupe PSA Italia s.p.a: represented the Italian subsidiary of Groupe PSA, a major French automotive group. However, it is important to note that Groupe PSA merged with Fiat Chrysler Automobiles (***) to form Stellantis in January ****, one of the largest automotive companies in the world. Before the merger, Groupe PSA included well-known brands such as Peugeot, Citroën, DS Automobiles, and Opel/Vauxhall. The company was renowned for its wide range of vehicles covering different market segments, from compact and city vehicles to sedans, SUVs, and commercial vehicles. With the formation of Stellantis, the operations of Groupe PSA Italy have been integrated into this new, larger entity, which continues to manage and develop the brands formerly under Groupe PSA, as well ...

4 Supply analysis

4.1 Type of the offer

The dealer is nothing more than a dealer with the task of reselling in his own name and for his own account goods produced by the industry that produced them and from which he acquired them (***) who dictates his own sales rules, for example through a special offer that other dealers do not propose. In other words, he is the one who freely sets the relationship with the customers, while protecting the image and quality of the brand he represents. However, the contract may provide for a minimum of intervention by the manufacturer in the decisions of the dealer who, in return, receives as a guarantee of greater earnings a quid pro quo that may be the exclusive sale of that product in his territory. The dealer agrees to:

use only the grantor's trademark; comply with the brand's advertising obligations; achieve certain sales targets; not to use the grantor's trademark for other products than those stipulated in the contract; not register in its own name the trademark owned by the manufacturer.

In general, car dealerships are divided into * types, namely, used car dealerships, in which cars are bought from individuals or other dealerships and resold to other individuals or other dealerships, ...

4.2 The prices

for the analysis of prices related to automobiles, consumer price indexes for new and used car purchases powered by gasoline, diesel, and electric or hybrid cars are analyzed.

For diesel-powered cars, between January **** and November ****, the consumer price index for new cars shows a growth of **.* points. This means that in the span of almost * the average prices for this type of car increased by **.* percent. There is also a marked increase in consumer prices for used cars. Over the period analyzed, average prices rose by **.* percent. While between January **** and October **** the index shows a negative trend between October **** and November **** there is an increase of **.* points.

Consumer price index for diesel-powered cars Italy, ****-****, base ****=*** Istat

A marked increase in consumer prices can also be shown for gasoline-powered cars. Between January **** and November ****, average prices for new cars show a growth of **.* percent. The growth appears to be constant during the entire period and is particularly concentrated in the period following the outbreak of the Russian-Ukrainian conflict in February ****. As for used cars, an increase in the price index of **.* points can be seen. This means that over the past * years, average prices for used gasoline cars have increased ...

4.3 New supply trends: Amazon's entry into the car market

Amazon is entering the online car sales market, starting with a major partnership with Hyundai. Starting in the second half of ****, it will be possible to buy Hyundai vehicles on Amazon's website in the United States, followed by other brands later that year. This move represents a significant step in the diversification of Amazon's offerings and expansion into the automotive sector. Customers will be able to browse the wide selection of vehicles available in their area, choosing based on preferences such as model, trim, color, and features. Once they have chosen their preferred vehicle, they will be able to proceed with the online purchase using their desired payment and financing options. It will be possible to pick up the purchased car at a local dealer or, in some cases, have it delivered directly.

Until now, Amazon sold car accessories and operated an "Amazon Vehicle Showrooms" site that allowed manufacturers to advertise, but it was not possible to purchase cars directly. With this new initiative, local dealers will maintain a central role in the sales process, with Amazon serving as a platform to connect customers to dealers, increasing their visibility and offering greater convenience to customers.

(***)

5 Regulations

5.1 The legislation

Listed below are some of the main legislative issues pertaining to the activities of car dealers in Italy:

Regulation (***) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector. Presidential Decree No. ** of February **, ****: regulation implementing Directive ****/**/EC on the availability of information on fuel economy and CO* emissions to be provided to consumers regarding the marketing of new passenger cars. Law No. *** of August *, ****: conversion into law of Decree-Law No. ** of June **, **** on the duration and termination of contracts between dealer and manufacturer. Article **** of the Civil Code: states that "a sale is a contract having as its object the transfer of ownership of a thing or the transfer of another right for the consideration of a price." Article **** of the Civil Code: states that "administration is the contract by which one party undertakes, for consideration of a price, to perform, for the benefit of the other, periodic or continuous services of things." Article **** of the Civil Code: states that the dealer may, however, exercise the right of recourse against the manufacturer. In more detail, when the dealer is liable to the purchaser because of a lack ...

6 Positioning of actors

6.1 Segmentation

  • Volkswagen Group Italia s.p.a
  • Groupe PSA Italia s.p.a
  • Mercedes Benz Italia s.p.a
  • Reanault Italia s.p.a
  • https://www.autotorino.it/
  • Eurocar Italia s.r.l
  • Carpoint s.p.a
  • Fratelli Giacomel s.p.a

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