ACEA

- ITALY

There are few countries in Europe – or, indeed, the world – where the motor car is such a strong expression of national and individual identity as in Italy. The nation’s obsession with the racing fortunes of Ferrari in Formula One reflects its collective love of speed, excitement and beauty. The look of a car matters much to most Italians which is why the country has long been the source of the world’s leading car designers. But during the past century, Italy has also excelled in engineering skills able to develop highly successful low-cost small cars such as the Fiat 500 alongside premium models like Ferrari and Maserati. In the last 30 years these celebrated marques, together with Lancia and Alfa Romeo have been acquired by FIAT, the nation’s oldest mass producer of automobiles which now accounts for around 90% of Italian car production.

The automotive sector in Italy contributes a significant 8.5% to Italian GDP – nearly one quarter of the contribution from all manufacturing industries. The sector’s total turnover is more than €54bn with a directly-employed labour force of around 200,000 people.

* only direct employment; total employment depending on automotive sector is around five times higher

Recovery underway

After a steep decline between 2001 and 2005, domestic car production is beginning to recover. Helped by the launch of new models, growth was 16.7% in 2006 over 2005 and total car production reached 1,211 million units. Light Commercial Vehicle (less than 3.5 tons GVW), production was slightly up at 272,205 units (+0.9%) while heavy truck manufacturing was 44,020 units (+11.1%).

Demand for new cars in 2006 was relatively strong at 2,325 million units (+3.9%) The LCV market was up 8.3% on 2005 while sales of heavy trucks were 35,751 units, more or less in line with the previous year.

Out of total production worth €24bn in 2004 (+7% on 2003), exports accounted for €13bn, 54% of the total. Italian companies’ primary markets are in Europe (which absorbs 75% of exports), but they are building increasingly strong positions in the Americas (12% of exports), and Asia (8%).

Distinction in design

Since Turin is the centre of car manufacturing in Italy, it is not surprising that the top 10 design firms are located in and around the city. The largest and possibly best known, Pininfarina, employs more than 2,000 people since it also produces cars (around 80,000 per year) as well as designs them. Other celebrated names upon which the Italian reputation for designing sexy cars is based include Giugiari, Michelotti and Frua.

Regionally concentrated supplier networks

Italy’s leading international position owes much to the supplier networks specialising in the production of spare parts and accessories. The Turin area and the Piedmont region as a whole accommodate the nation’s most important industrial clusters. More than 470 component makers, 40% of Italy's suppliers are located there (with 33% of the workforce), with a peak of 75% for suppliers of modules and systems. As a whole, the regional supplier system employs over 43,000 people, about 70% of which is located in the province of Turin.

Sources of new technologies

The automotive sector is Italian manufacturing's star performer not least because of the important contributions it makes to R&D; at the national level and to its role in the introduction of new technologies on the international scene. Worldwide R&D; expenditure (including cars, trailers, semi-trailers, buses, spare-parts, etc.) amounted to about €2bn in the year 2005. Several universities offer tailored graduate or post-graduate courses of particular interest for the automotive industry, such as the specialized automotive courses or programs run by the Turin "Politecnico", the University of Modena and Reggio Emilia, the University of Pisa and the Federico II University in Naples.

Moreover, automakers and automotive related industries can also profit from the research activities of other centres of excellence. Among the most important, "CENTRO RICERCHE FIAT" (CRF) is specialized in research & development activities on engines, vehicles, electronic systems, productive processes and technical/managerial methodologies. It has around 930 employees and a network of more than 1.000 partners (universities, research institutions, national and international firms). The CRF is unique within the Italian R&D; community being entirely financed by private capital and wholly dedicated to transferring its R&D; results to industry.

"Elasis" is a another highly specialized research center which carries out applied R&D; in the automotive sector focusing on the study of new design methodologies and advanced trials and on their application in the development of highly innovative products/processes. With its 800 employees and €260mn investments, it is the biggest research institution located in Southern Italy. Also worthy of mention is the "Centro Sviluppo Materiali" which is a national and international reference point for research into innovative materials and related production design and technologies.