By the end of 1999, diesels accounted for 60% of the vehicles run by companies with more than 10 vehicles on their books (cars and light commercial vehicles up to 3.5 tonnes), while diesel sales accounted for 27% of the entire Italian market.
And the trend looks set to continue, with several leasing companies, including Hertz Lease and Dial, forecasting that 70% of their models will be diesel by the end of this year as fleet managers adopt diesels because of the increasingly prohibitive cost of petrol (2,075 Lire/1.1 a litre), rising average annual mileages and the arrival on the market of the latest generation common-rail and direct-injection diesel engines.
Currently, petrol taxes and VAT on sales of fuel amount to some 53.700 billion Lire (€28 billion) annually.
That equates to 49% of the government's revenue generated by goods and services in the automotive industry (including VAT on new-car sales and road tax) which, in turn, represents 18.6% of Italy's total tax revenue. Less than 25% of those funds generated are actually re-invested in improving road infrastructures compared to the European average of 35%, so there is increasing pressure on the government to reduce petrol taxes even further.
Another key trend is in the reduction of businesses outright-purchasing their company cars, and the commensurate increase in leasing and external fleet management. Sales to private companies are expected to decrease by some 6% over the coming year, while leasing continues to gather ground.
While fleet car sales are still dragging behind other European countries, with only 22% of new cars going to companies, there has been a veritable boom in interest in fleet management services in the past few years. The message is finally getting through that big is beautiful - smaller companies with a handful of cars can expect to get no more than a 13% discount from dealers, while the bigger leasing firms can obtain 30% with evident cash flow benefits for the end user.
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