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Title: THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY ITALY Fact Pack


1
THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT
INDUSTRY ITALY Fact Pack
  • Swedish Trade Council in Italy
  • 2006

2
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Italian Construction Equipment Industry
  • Recommendations
  • References

3
THE ITALIAN MANUFACTURING INDUSTRY PRODUCES FOR A
VALUE OF SEK 7 600 BILLION
  • The total turnover of the Italian manufacturing
    industry is SEK 7 615 billion
  • the Swedish manufacturing industrys turnover is
    SEK 1 357 billion
  • The most important sectors within the
    manufacturing industry are construction of
    machinery and food related production
  • There are approximately 540 000 companies active
    within the manufacturing industry in Italy
  • 4.9 million employees
  • The Italian industrial structure is dominated by
    small companies. 83 of the manufacturing
    companies employs less than 9 employees.
  • The average labour cost for an industry worker in
    Italy is SEK 198 per hour

Machinery construction and food production stand
for 20 of the total Italian manufacturing
industry
Source ISTAT, Eurostat
4
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Passenger Cars
  • Commercial Vehicles
  • Suppliers
  • Italian Construction Equipment Industry
  • Recommendations
  • References

5
THE ITALIAN PRODUCTION OF CARS AND COMMERCIAL
VEHICLES TOTALS SEK 407 BILLION - the latest
statistics indicates an upswing in value of
production
Production of cars and commercial vehicles
industry in Italy
billion SEK
Trailers and containers SEK 14 billion
Vehicles and engines SEK 132 billion
Components and accessories SEK 260 billion
Growth mainly due to increasing exports of
Italian automotive suppliers
Source ISTAT
6
MORE THAN 1 MILLION VEHICLES ARE PRODUCED IN
ITALY - Italy stands for about 5 of the
worldwide vehicle production
VEHICLE MANUFACTURERS
COMMERCIAL VEHICLES (314 000 vehicles)
LIGHT TRUCKS (270 000 vehicles)
BUSSES (4 000 vehicles)
HEAVY TRUCKS (40 000 vehicles)
PASSENGER CARS (723 000 vehicles)
  • 3 manufacturers
  • Iveco (part of Fiat Group) 183 000
  • Sevel (Joint Venture between Fiat Auto and PSA)
    81 000
  • Piaggio 6 000
  • 3 manufacturers
  • Irisbus (part of Iveco) 3 200
  • Carozzeria Barbi
  • (Volvo) 400
  • Breda Menarini Bus 400
  • 1 manufacturer
  • Iveco (part of Fiat Group)
  • Trailer manufacturers
  • Rolfo
  • Merker (Margaritelli)
  • Acerbi Viberti
  • Officine Cardi
  • Menci C.
  • Pezzaioli Carozzeria
  • 4 manufacturers
  • Fiat Group (Fiat, Lancia, Alfa Romeo, Maserati
    and Ferarri) 700 000
  • Volkswagen Group (Lamborghini) 1 500
  • Pininfarina (Mitsubishi, Alfa Romeo and Ford) 14
    000
  • Bertone (Opel) 7 500

Source Automobile Produktion
7
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Passenger Cars
  • Commercial Vehicles
  • Suppliers
  • Italian Construction Equipment Industry
  • Recommendations
  • References

8
THE ITALIAN PRODUCTION OF PASSENGER CARS HAS
PERFORMED POORLY BUT IS SHOWING SIGNS OF RECOVERY
Development the last 5 years
Passenger Car Production in Italy
  • The Italian quote of the worldwide vehicle
    production has decreased from 8,2 in 1999 to
    4,7 in 2004.
  • In terms of volume this means a decrease of about
    40 . Compared with 2004 the production in 2005
    decreased with about 13 .
  • The problems can in part be explained by
    Investment in lower-cost production abroad.
  • Another reason for the decrease is the sluggish
    development and problems of Fiat Auto which have
    four major explanations
  • Product range Limited and underdeveloped.
    Insufficient investments in RD and product
    development
  • International presence Significant presence on
    to few foreign markets. Inability to take
    advantage of motorization in developing
    countries.
  • Sales and After Sales network Underdeveloped in
    terms of service quality and customer
    satisfaction.
  • C-segment Wrong market positioning of the Fiat
    Stilo has jeopardized the presence in a segment
    with very high volumes.
  • Fiat is now however showing signs of a strong
    recovery and future prospects looks brighter.

Vehicles
Source STC, interviews, ANFIA, Il Sole 24 Ore
9
FIATS PURCHASE DECISIONS FOR THE ITALIAN
PRODUCTION IS CENTRALISED TO HEADQUARTER IN TURIN
Passenger Cars
Source Kompass, interviews
10
THERE ARE A TOTAL OF 13 CAR MANUFACTURING PLANTS
IN ITALY - Most of them are operated by Fiat Auto
Fiat Group Chivasso
Pininfarina Bairo Canavese
Fiat Group (Ferrari) Maranello
Pininfarina San Giorgio Canavese
Fiat Group (Maserati) Modena
Pininfarina Grugliasco
Wolkswagen Group (Lamborghini) Sant Agata
Bolognese
Fiat Group Mirafiori
Bertone Grugliasco
Fiat Group Cassino
Fiat Group Melfi
Fiat Group Pomigliano
Fiat Group Termini Imerese
Source Automobile Produktion, interviews
11
FIAT IS SHOWING SIGNS OF AN IMPRESSING TURN
AROUND AFTER YEARS OF POOR PERFORMANCE
Trends within the Italian passenger car industry
  • After many years of losing market shares and
    reporting huge losses, Fiats car business is
    showing signs of an impressing turn around. After
    the divorce with GM in 2005, and after showing
    losses of EUR 2 bln in 2004, Fiat Auto is now
    reporting a 70 fall in losses compared with a
    year earlier.

Fiat is picking up speed
  • Increased competition and continuous price
    reductions is moving Fiats production abroad and
    switching its loyalty with its Italian suppliers
    towards a higher dependence on suppliers from
    countries with lower costs.

Globalization
  • Fiats new chief executive Sergio Marchionne has
    ended the companys traditional strategy of
    pinning its hope to the next new car. Fiat will
    now try to compete in more market segments by
    creating a larger range of models.
  • This fragmentation of market leads to the need of
    using common platforms for various models in
    order to create flexibility. Suppliers will thus
    have to be able to deliver whole modules to car
    factories.

Fragmentation of market
Source STC, Interviews
12
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Passenger Cars
  • Commercial Vehicles
  • Suppliers
  • Italian Construction Equipment Industry
  • Recommendations
  • References

13
ITALIAN PRODUCTION OF COMMERCIAL VEHICLES WHICH
IS HEAVILY DOMINATED BY LIGHT TRUCKS IS
INCREASING
Development the last 5 years
Commercial Vehicle Production in Italy
  • After an exceptional, and statistically
    distorting, beginning of the 21st century because
    of fiscal stimulations the Italian production of
    commercial vehicles has since the slight downturn
    in 2003 been steadily increasing for more natural
    reasons
  • Overall the increase in production from 2003
    reached 6 (CAGR 2 ).
  • The increase is driven by strong performance of
    light trucks whose production boomed in 2004
    growing with 4,6 .
  • The increase is in part explained by the strong
    performance of Fiat and Iveco depending on
    successful releases of new models (especially by
    penetrating more segments of the LCV market) and
    a very aggressive marketing policy.
  • The increase has also been driven by domestic
    demand because of Italian companies need to renew
    obsolete car fleets.

Vehicles
Source STC, Interviews, ANFIA, UNRAE
14
THE ITALIAN PRODUCERS FIAT AND IVECO BOTH MAKES
PURCHASE DECISIONS AT HEADQUARTERS IN TURIN
Commercial vehicles
Source Anfia,Kompass,interviews
15
THE ITALIAN COMMERCIAL VEHICLE INDUSTRY IS
DOMINATED BY FIAT AND FIAT CONTROLLED IVECO
Source Automobile Produktion, interviews
16
THE POSITIVE TREND WITH A RISING PRODUCTION OF
COMMERCIAL VEHICLES SHOWS NO SIGNS OF STAGNATING
Trends within the Italian commercial vehicle
industry
  • The Italian producers of commercial vehicles are
    performing strongly
  • The production and sales of Italian commercial
    vehicles has been functioning as a role model for
    the production of passenger cars. The production
    has been rising thanks to intelligent product
    releases and the positive trend shows no signs of
    bringing to a halt.

Increasing production volumes
  • In order to achieve economies of scale and to
    share fixed costs the industry has been
    consolidating
  • The most significant example is that Irisbus,
    formerly a joint venture between Iveco and
    Renault, is now a wholly owned subsidiary of
    Iveco (Fiat Group).

Consolidation of market
  • Today not only the large companies are looking
    for flexible, individualized solutions even
    medium sized businesses are increasingly looking
    for customized financing deals, particularly when
    it comes to leasing solutions.

Customized services
Source STC, Interviews
17
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Passenger Cars
  • Commercial Vehicles
  • Suppliers
  • Italian Construction Equipment Industry
  • Recommendations
  • References

18
THERE ARE ABOUT 1 700 AUTOMOTIVE SUPPLIERS IN
ITALY - But the medium size of companies is
rather small
Geographical concentration of automotive
suppliers
Italian automotive suppliers
  • Totally there are about 1 700 suppliers to the
    automotive industry active on the Italian market.
  • The suppliers are located in the northern parts
    of Italy, close to the HQ of Fiat Auto and the
    most important car plants
  • Close to a third of all suppliers are based in
    the region of Piedmont where Turin and the HQ of
    Fiat is located.
  • The Italian suppliers are generally small or
    medium sized companies
  • The average number of employees for an Italian
    supplier is about 70
  • The largest Italian suppliers to the automotive
    industry are Pirelli, Sogefi, Brembo and
    Magnetti Marelli.
  • Traditionally Italian suppliers are especially
    strong in engineering and design.

Source STC, interviews, ANFIA
19
EVEN DUE TO A CONSOLIDATION OF MARKET THE NUMBER
OF ITALIAN AUTOMOTIVE SUPPLIERS IS STILL HIGH
T1 SUPPLIERS (examples of the largest ones)
Electrical systems
Interior equipment
Propulsion
Body
Running gear
  • Cables, bus systems, embedded systems
  • Magneti Marelli Sistemi Elettronici
  • Delphi Italia Automotive Systems
  • Valeo
  • Power train, exhaust systems, engines
  • Magneti Marelli Powertrain
  • Delphi Italia Automotive Systems
  • Dayco Europe
  • Fiamm Automotive Batteries
  • Cockpit, seats, dash- board, air conditioning
  • Lear Corporation
  • Delphi Italia Automotive Systems
  • Valeo
  • Intier
  • T.R.W Automotive Italia S.p.A
  • Johnson Controls Italia
  • Body, roof, glass, doors, lighting etc.
  • Automotive Lighting Rear Lamps Italia (Magneti
    Marelli)
  • Lear Corporation
  • Valeo
  • Suspension, brakes, axles, steering, tires
  • Magneti Marelli Sistemi Sospensioni
  • Sogefi
  • Pirelli Tyre
  • Carraro
  • Brembo
  • Delphi Italia Automotive Systems
  • T.R.W Automotive Italia
  • Bosch -Tecnologie Diesel e Sistemi Frenanti

Source Anfia,interviews
20
TIER ONE SUPPLIERS DETAILED INFORMATION (1/2)
T1 Suppliers
Source Kompass, interviews
21
TIER ONE SUPPLIERS DETAILED INFORMATION (2/2)
T1 Suppliers
Source Kompass, interviews
22
FOR STRATEGIC REASONS THE T1 SUPPLIERS ARE MOSTLY
FOUND NEAR THE HQs AND PLANTS OF THE OEMs
Source STC
23
MANY T2 SUPPLIERS ARE SMALL, LOW VALUE ADDING
FIRMS THAT FACE HARD COMPETITION FROM LOW-COST
COUNTRIES
T2 SUPPLIERS (examples of the largest ones)
Electrical systems
Interior equipment
Propulsion
Body
Running gear
  • Cables, bus systems, embedded systems
  • ITT Industries Friction Products
  • ASK Industries
  • Power train, exhaust systems, engines
  • Fonderie Mario Mazzucconi
  • SKF Industrie
  • Metelli
  • Ufi Filters
  • Cockpit, seats, dash-board, air conditioning
  • Gammastamp
  • Conceria Pasubio
  • Body, roof, glass, doors, lighting etc.
  • Automotive Lightning Italia Rear Lamps (Magneti
    Marelli)
  • Olsa
  • Federal Mogul Operations Italy
  • Suspension, brakes, axles, steering, tires
  • Gruppo Sogefi
  • Metelli
  • Federal Mogul Operations Italy
  • Sila Holding Industriale

Source Anfia, Automobil Cluster
24
TIER TWO SUPPLIERS DETAILED INFORMATION (1/2)
T2 Suppliers
Source Anfia, Automobil Cluster, Kompass
25
TIER TWO SUPPLIERS DETAILED INFORMATION (2/2)
T2 Suppliers
Source Anfia, Automobil Cluster
26
ITALIAN SUPPLIERS HAVE DIVERSIFIED THEIR CUSTOMER
BASE, AND SPECIALISED THEIR PRODUCT PORTFOLIOS
Trends within the Italian automotive supplier
industry
Customer portfolio diversification
  • Many Italian automotive suppliers have
    traditionally had Fiat Group as their single
    client. There is now a clear tendency for
    suppliers to diversify their customer portfolio
    with non-Italian customers.
  • Italian suppliers are now performing very well
    because of increasing exports and less dependence
    on Fiat Group.

Product portfolio specialization
  • Italian automotive suppliers are slowly becoming
    more specialized (i.e. creating product
    portfolios with focus on core products,
    technologies and competences).
  • With these more specialized product portfolios
    suppliers are at the same entering similar
    non-automotive industrial sectors.

Strategic cost reduction actions
  • Delocalization of Italian automotive suppliers
  • Production facilities established in low-cost
    countries (mainly for labor intensive operations)
  • Increase of sourcing volumes from low-cost
    countries
  • Production capacity and workforce down-sizing

Source STC, interviews
27
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Italian Construction Equipment Industry
  • Manufacturers
  • Suppliers
  • Recommendations
  • References

28
THE ITALIAN PRODUCTION OF CONSTRUCTION EQUIPMENT
TOTALS ABOUT SEK 43 BILLION - the industry grew
with more than 8 in 2005
Production machine and construction vehicles in
Italy
billion SEK
Road Equipment SEK 3 billion
Concrete Equipment SEK 6 billion
Tower Cranes SEK 3 billion
Crushing, Washing, Sizing Equipment SEK 2
billion
Earthmoving Equipment SEK 29 billion
Growth mainly a result of increases in exported
volumes
Source Committee for European Construction
Equipment
29
TOTALLY THERE ARE ABOUT 300 COMPANIES ACTIVE
WITHIN THE CONSTRUCTION EQUIPMENT INDUSTRY IN
ITALY - But many companies are small and only
active locally
CONSTRUCTION EQUIPMENT (examples of the largest
companies in the industry)
ROAD
MINING
EARTH MOVING
LIFTING
Graders, asphalt pavers, asphalt mixers
Wheel loaders, drills, haulers
Excavators, wheel loaders, backhoe loaders, Skid
steer loaders, haulers
Mobile cranes, forklifts
  • Bitelli (Catepillar Italia)
  • Antec
  • Marini
  • CNH (Fiat Group)
  • Fiori SpA
  • Solimec
  • Casagrande
  • Komatsu Italia SpA
  • CNH (Fiat Group)
  • Astra Veicoli Industriali (Owned by IVECO and
    part of Fiat Group)
  • Merlo
  • SCAI SpA (Hitachi)
  • Fiori SpA
  • Macmoter SpA
  • Euromach Srl
  • Marchetti Autogru
  • Raimondi
  • Merlo
  • Terexlift
  • Amoc Veba Srl

Source UCoMESA , Anima
30
CONSTRUCTION EQIPMENT OEMs DETAILED INFORMATION
(1/2)
Source Kompass, UCoMESA, Anima,
31
CONSTRUCTION EQIPMENT OEMs DETAILED INFORMATION
(2/2)
Source Kompass, UCoMESA, Anima,
32
THE ITALIAN CONSTRUCTION EQUIPMENT INDUSTRY IS
CONCENTRATED TO THE REGION EMILIA ROMAGNA
Vicenza Komatsu
Fontanafredda Casagrande
Brescia Euromach
Milan Antec Raimondi
Alfonsine Marini
Cervasca Merlo
Minerbio Bitelli
Piacenza Marchetti Autogru Astra Veicoli
Industriali
Cesena Soilmec
Modigliana Macmoter
Poviglio Amoc Veba
Umbertide Terexlift
Modena CNH Fiori
33
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Italian Construction Equipment Industry
  • Manufacturers
  • Suppliers
  • Recommendations
  • References

34
MOST OF THE ITALIAN SUPPLIERS TO THE CONSTRUCTION
EQUIPMENT OEMs ARE SMALL AND MEDIUM SIZED
COMPANIES
SUPPLIERS (examples of the largest ones)
Electrical systems
Propulsion and running gear
Steel construction
Hydraulics
Accessories
Power train, engines, exhaust systems, axles
Cables, sensors, semi conductors, control units
Undercarriage and body
All kind of hydraulic cylinders
  • All kind of accessories
  • Siemens Vdo Trading
  • Robert Bosch
  • Bosch Rexroth
  • C.A.M.I
  • Hydrocontrol
  • Homberger
  • Safim SpA
  • Italscania SpA
  • Perlini International
  • SKF Italia
  • Cararro SpA
  • Bosch Rexroth
  • SAIM Europe Srl


  • Berco SpA
  • Cobo
  • Case del Sedile
  • Isringhausen
  • Webasto product Italy

SourceSTC, interviews
35
CONSTRUCTION EQUIPMENT SUPPLIERS DETAILED
INFORMATION (1/2)
Construction equipment suppliers
Source STC, Kompass, interviews
36
CONSTRUCTION EQUIPMENT SUPPLIERS DETAILED
INFORMATION (2/2)
Construction equipment suppliers
Source STC, Kompass, interviews
37
THE SUPPLIERS TO THE CONSTRUCTION EQUIPMENT OEMs
ARE CONCENTRATED AROUND MILAN IN THE REGION OF
LOMBARDY
Brescia Cobo
Varese Isringhausen
Trento Italscania
Milan Siemens Vdo Trading Robert Bosch Webasto
Product Italy Bosch Rexroth Saim
Padova C.A.M.I. Carraro
Verona Perlini International
Ferrara Berco
Turin SKF Itallia
Modena Casa del sedile Safim
Genua Homberger
Bologna Hydrocontrol
Source STC, interviews
38
THE GROWTH OF THE ITALIAN PRODUCTION OF
CONSTRUCTION EQUIPMENT IS EXPECTED TO CONTINUE -
In large parts based on increasing foreign demand
Trends within the Italian Construction Equipment
industry
  • In 2005 the Italian production of construction
    machinery increased with more than 7.5 . In the
    coming years a further growth is foreseen,
    relying on a steady demand both from the Italian
    market (thanks to the realization of large
    construction projects) and from foreign markets.

Continuous growth in produced volumes
  • Italian companies have been losing market shares
    to Asian producers, who are pushing down general
    price levels.
  • In order to meet the competition Italian
    companies are working on differentiating their
    product offering and increasing the quality of
    the after sales service.

Increasing competition from far east countries
  • Italian production of construction equipment is
    heavily dependent on sales to foreign markets.
  • Today close to 70 of production is sold abroad
    and the weight of exports continues to grow since
    exports increases more than domestic demand.

Weight of exports as part of total sales
increases
Source STC, interviews
39
CONTENT
  • Overview Italian Manufacturing Industry
  • Italian Automotive Industry
  • Italian Construction Equipment Industry
  • Recommendations
  • References

40
WHEN DOING BUSINESS IN ITALY LOCAL PRESENCE CAN
MANY TIMES PROVE TO BE A GREAT ADVANTAGE
Country specific recommendations for doing
business in Italy
Local presence important
  • Local presence is often a great advantage.
    Italian companies are used to working closely
    with their counterpart and local presence with an
    Italian speaking representative is often an
    important success factor.

Fragmented value chains
  • The value chain in Italy is often fragmented.
    Many actors are involved in the distribution
    network and the use of local agents can often be
    an effective way to reach the end customer.
  • Forming a company in Italy is a very bureaucratic
    process and assistance in this process is highly
    recommended.
  • Deals with agents and distributors should be
    overseen by legal adviser since regulations
    differ a lot from Swedish practise.

Differing rules and regulations
Late payments
  • Be prepared that time of payment is among the
    longest in Europe. Italian customers will be
    resistant to accepting a time of payment under 60
    days this should be considered when negotiating
    with the Italian counterpart.

Source STC, interviews
41
THE ITALIAN AUTOMOTIVE INDUSTRY IS LOOKING FOR
SUPPLIERS COMPETITIVE IN BOTH PRICE AND TERMS OF
DELIVERY
Industry specific recommendations for doing
business with the Italian automotive industry
Delivery
  • Lead time and frequency of delivery are important
    selection criteria. Supply-mix flexibility and
    sequenced-in-line supply capabilities are also
    key success factors when competing for doing
    business with Italian automotive companies.

Price
  • Price competitiveness is very important and it is
    generally viewed as an advantage if the
    prospective supplier has its own manufacturing
    facility in a low cost country.

Closeness to customer
  • Local presence with manufacturing-, logistics-
    (e.g. warehouse) or commercial premises as close
    as possible to the customers manufacturing
    plants or purchase decision centres can be a key
    selection criterion when the Italian automotive
    company chooses supplier.

Source STC, interviews
42
CONTENT
  • Overview Italian industry
  • Italian Automotive industry
  • Recommendations
  • References

43
STC IN ITALY CAN SUPPORT SWEDISH COMPANIES IN ALL
ACTIVITIES FROM MARKET ANALYSIS TO BUSINESS
START-UP
Market analysis
  • Evaluation of market characteristics and market
    potential.
  • Identification and evaluation of business
    opportunities, customers and sales channels.
  • Analysis of, and benchmark with, established
    competitors.
  • Identification of possible trade laws and
    regulations affecting the specific product or
    service.

Partner search
  • Identification and evaluation of potential
    distributors, agents and suppliers.
  • Initiate and conduct discussions with potential
    partners.
  • Arrangement and realization of business meetings.

Business support office
  • Local sale- and Key Account support.
  • Back-office support Economic administration,
    customer service, administration of personnel.

Business start-up
  • Formation of Italian subsidiary.
  • Recruitment / head hunting
  • Property search
  • Assistance in merger acquisition

Source STC
44
STC IN ITALY HAS A VAST EXPERIENCE OF HELPING
SWEDISH FIRMS DOING BUSINESS WITH THE ITALIAN
AUTOMOTIVE INDUSTRY
Examples of Swedish companies STC in Italy have
worked with on the Italian market
Source STC
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