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ANCMA in Italy Pleads for Official Action Amid PTW Market Woes

Director general encourages younger people to use PTWs as daily transport

2012/09/26 | By Quincy Liang

Besides the often reported financial woes besetting Italy, the largest powered two-wheeler (PTW) market in Europe has also been suffering steadily dropping sales that are threatening its long-established PTW industry, one that may have given the world the iconic Vespa and blueprints for the show-stopping Ducati, with enough gravity to motivate many operators and trade associations to devise ways to stay afloat.

Perhaps the group with the most to lose for representing a huge cross-industry membership, the ANCMA (National Association for the Bicycle, Motorcycle and Accessory Industry) recently proposed new tools and services to the sector and urged the Italian government for tailored measures to revive the PTW market.

During its general assembly in Milan in late June, the ANCMA, besides the above-mentioned moves, reiterated previous statements by the Italian Business Association to ask for austerity measures already in place be followed by growth.

Italian PTW brands are still
Italian PTW brands are still "dream machines."

Corrado Capelli, ANCMA president, said: "In this time of economic uncertainty and absence of immediate solutions, we want to lay the foundation for proper reflection and jointly create a system that can effectively achieve our common goals. We are deploying actions and interventions as well as projects to seek sustained dialogue with institutions."

The ANCMA quoted Giorgio Squinzi, president of the Italian Business Association who told the government: "We do not ask for favors or privileges. We will not ask for the moon. We are just asking to be working in a less difficult and inhospitable country, more normal, more like other advanced countries."

The ANCMA admitted to fearing a downward spiral generated by tax increases, followed by declining consumptions, eventually producing a drop in public revenues and again a new spike in fiscal burdens. The value added tax (VAT) increase, not yet disavowed by the Italian government, will further depress the ailing Italian market.

Gloomy economic prospects leave PTWs in showrooms.
Gloomy economic prospects leave PTWs in showrooms.

Shrinking Market & Proposed Plans
The Italian PTW market had shrunk by 17% in 2011, compared to the previous year. In the first five months of 2012, it declined by another 27% YoY, with the pre-owned vehicle market also suffering a 13% YoY drop.

The trade balance, however, remained positive, with exports exceeding imports by over 707 million euro in 2011 for a 25.7% YoY increase, during which PTW brands generated the majority of export revenue.

Amid falling purchasing power and declining consumer confidence, the vehicle segment is particularly weakened by delayed fleet renewal schemes. So0me 50% of Italy's PTWs in use or around 4.5 million vehicles are obsolete.

The ANCMA says that the new stimulus package proposed by the Italian government for the automotive sector involves promoting low-CO2 emissions vehicles, to which the ANCMA proposes to add PTWs with emissions below 95g/km. This incentives plan, however, relies on a limited budget of 70 million euro to be shared by vehicles of every category.

The ANCMA says it also wants to include PTWs with advanced braking systems and traction control in the plan, which helps to raise consumer awareness of devices that improve safety.

To achieve higher PTW purchases especially by younger people by making financing easier rather than a dream, the ANCMA proposes creating a fund specifically tailored for such segment, enabling borrowing at lower interest rates.

The ANCMA says it has been closely working with policymakers to improve the Road Code, which is being discussed by the Transport Committee of the Italian Parliament. Proposals include defining motorcyclists as vulnerable road users, improving road infrastructure, redesigning road signs dedicated to PTW users, and access to bus lanes for mopeds and motorcycles.

Other issues of concern include cost of PTW insurance, which are generally higher than that for car insurance. The higher cost is partly attributable to false claims, with culprits trying to defraud insurers, a phenomenon of dramatic proportions in some areas of Italy.

A solution may be for insurers to pay to install GPS on PTWs to enable monitoring of fraud, staged accidents, with the added cost easily offset by unjustified claims.

Pier Francesco Caliari, ANCMA's Director General, lived up to his role to promote the PTW sector, encouraging amid a changing society younger riders to use PTWs as daily transport, that such riders should be motivated to speak the same language to bring forth new passion, perhaps implying that PTWs are greener vehicles for a world stressed by global warming.

Shrinking Markets
Almost the entire European Union is suffering a steady sales drop of new PTWs.

With a drop of 15% in the first five months of 2012, the European PTW market seems unable to arrest sales decline, according to ACEM (Association of Motorcycle Manufacturers in Europe).

Statistics compiled by the ACEM show that the first quarter of 2012 is a grim indicator of the year. The 8.2% YoY decline in the first quarter is confirmed by a 15% aggregate YoY drop for the first five months of the year.

May also impacted Germany (-6.7%), a market that seemed immune to sales decline. However, the European situation is clearly attributable to the contagion unleashed by the peripheral nations, with Spain, Portugal and Greece, besides inherently weak economies, suffering from growing unemployment, unstable political leadership and crumbling consumer confidence.

Only the U.K. is resisting the spill, with a modest 0.7% YoY sales increase in May. Every other main European market reports double-digit drops: France -14%, Italy -27%, Spain -21%, The Netherlands -22%.

In May only 151,924 PTWs were sold in the countries monitored by ACEM statistical service, compared to 193,973 in the same period last year. The recently-reported bailout of Spanish banks, desperate elections in Greece and talk of a Grecian exit from the EU do not help to strengthen tattered confidence in Europeans, who are already worried by the enduring recession in the main PTW markets.

Only Switzerland (+2.2%) and Norway (+5.3%), two non-EU countries, with politically stable administrations have positively performing PTW markets.

During the first five months of 2012, the ACEM says, sales of mopeds or sub-50cc models saw a decline of 17%, with sales of 50cc-plus PTWs dropping 14% YoY.