Italy Offers Green-Car Incentive, But Spiffs Won’t Last Long

TURIN – A new government incentive is encouraging car buyers here to go green, with estimates the plan could hike sales by 12,000-30,000 vehicles.

The government is earmarking €31.5 million ($43.7 million) for the program, which calls for automakers to chip in an identical amount. Incentives range from €2,000 to €5,000 ($2,800-$6,900) per vehicle.

Half the budget is reserved for fleet customers and business use. Another 35% is to support individual sales of cars with carbon-dioxide emissions of 95 g/km or less. The final 15% is pegged for vehicles with CO2 ratings of 50 g/km or less.

The Italian dealers association does not believe the program will have a significant impact on the country’s economy or that it will have an effect on new-vehicle demand beyond May.

The incentive plan comes at the time when the Italian market has shrunk to roughly half its size of six years ago but is beginning to show signs of recovery.

Last year, a government incentive to promote low-emission vehicles was depleted in only a few hours. Fiat already has committed to extend the benefits stipulated by the plan through the entire month of May, even if the fund is dried up before May 31.

In essence, the incentives should assure a 20% discount on the list price of new cars that meet the emissions requirements. An electric car can get up to a €5,000 discount.

Although Fiat has no electric vehicle for sale here, it has quite a range of liquid-petroleum-gas and compressed-natural-gas models and it is likely to get the greatest sales boost in the short term.

Nissan and Renault have the largest range of EVs, whereas Toyota is dominating the hybrid market segment with its Prius and Yaris. BMW also will be in the incentive game with its new i3, as long as it can meet the requirement that calls for delivery within 90 days of sale.

Last month the Italian market was up 1.9%, despite many buyers delaying purchases to wait for the incentive. Fiat sales rose 4.1%, marking the third month in a row it gained volume and market shares.

If only 12,000 more cars are sold this month through the support of the incentive plan, the market will move up 10%, perhaps sparking a trend that will continue in subsequent months.