Stop petrol and diesel: the prospects for Italy

After the approval by the European environment ministers of the plan to ban the sale of thermal cars from 2035, several leading exponents of the Italian automotive scene discussed the future of the national supply chain in the conference “Challenges and opportunities for the automotive supply chain” , organized by Intesa Sanpaolo. The Deputy Minister for Economic Development, Gilberto Pichetto Fratin: we must be ready

Emiliano Ragoni

@
emilianoragoni

June 30th

The occasion was important: the recent yes of the EU environment ministers for the farewell of heat engines in Europe starting from 2035. How will Italy and the many medium and small companies in the automotive sector react to this prospect? Will consumers be ready? Many of the leading exponents of the sector have tried to answer this and other questions, who gathered on 30 June in Milan at the Cariplo Foundation to participate in the conference “Challenges and opportunities for the automotive supply chain”, organized by Intesa Sanpaolo.

pre and post covid

For the automotive sector it is possible to speak of a pre- and post-pandemic world. 2019 closed with production levels slightly down compared to the previous year. Before the outbreak of the pandemic crisis, the sector had entered a phase of profound transformation driven by some macro-trends, such as, for example, the growth of electrification. In fact, in 2019 there was a significant increase in alternative fuel cars (+ 43% in the EU), against a sharp decline in diesel engines. In this period, the automotive supply chain continued to be affected by the phenomenon of decentralization, aimed at containing costs and accelerated by the progressive modularization of production platforms. This search for efficiency is evidenced, for example, by the merger involving two of the main European producers, FCA and PSA, who announced the birth of Stellantis in 2019. The spread of Covid-19 has had a heavy impact on the Automotive sector. During the first months of lockdown production was essentially blocked, demand collapsed and the recovery in the second half of 2020 was partial.

lack of chips, another blow

With the launch of large-scale vaccination programs in all major Western economies, there has been a gradual recovery in demand and production: globally, between the end of 2020 and the beginning of 2022, production returned to rise by 3%, in line with the sales segment (+ 4%). This recovery, however, was strongly held back by some new phenomena such as the shortage of chips and semiconductors, in addition to the rigidity on the logistics front, with difficulties in the procurement of critical materials for production and delays in the delivery of finished products. In support of the recovery, a positive signal came from the Italian Pnrr, which allocated 10.6 billion euros for the development of a more sustainable local transport, in line with the decarbonisation objectives, of which approximately 1.7 billion euros for renewables, batteries and charging stations, 0.5 for hydrogen, and 0.3 for electric buses.

The Italian and European perspectives

According to the company’s analysis AlixPartners, presented by CEO Dario Duse, in 2022, the global car market will close at 79 million vehicles, also due to the persistent shortage of chips and semiconductors. For 2023 a recovery is estimated with a share that could reach 87 million, while it will rise to 95 in 2024. In Europe the trend will be very similar; 2022 is expected to close at 15.9 million vehicles, which should grow to 17.5 million in 2023 and 19.2 million in 2024. Italy, which is one of the five most important car markets in Europe, could close 2021 at 1.5 million, to grow 1.7 in 2023 and 1.9 in 2024. In this context of substantial market recovery, electric and hybrid cars will dominate, with an exponential growth in share.

the Italian challenge

The Deputy Minister of Economic Development, Gilberto Pichetto Fratin, who participated in the event by making a speech connected in live streaming, underlined the moves made by the government to help the Italian auto sector, which in our country is worth 20% of GDP. In addition to the incentive campaign for the purchase of low-polluting cars, the NRR has in fact represented an opportunity. But this may not be enough since Italian small and medium-sized companies, very important for the automotive supply chain, need the necessary resources for reconversion. Italy, however, can take advantage of the opportunity of this transformation to reaffirm all its excellent know-how, with which it can once again be the protagonist. Because, underlined the deputy minister, this rapidly evolving context will lead about 400 companies to change jobs. “We must be ready, punctual and timely in accompanying this change of profession” – added Pichetto Fratin – “This is the challenge we have. A constructive dialogue between all companies in the sector and institutions is essential to support a relaunch program strategic and long-term, focused on sustainability, technological innovation, product specialization and dimensional growth “.



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