Italy

Last modification: 11 Jun 18
Introduction: 

Thank you for the contribution of the Italian Fleet Manager Association  

Chapter 1: Economic and business environment

Demographics

60.67 million (Dec '17)

Capital

Rome

Major cities

Milan, Rome, Turin, Florence, Boulogne, Naples

Languages

Italian

GDP

1,939.621 M$ 

Unemployment rate

11%

Main industries

Metal industry, agro-food, food & beverage, textile, plastic machinery, biomedical and pharmaceutical

Currency

Euro

Interest rate

0%

Fleet Maturity Index (scaling)

The history of long-term rental in Italy is quite recent.
In fact, in the early 1970s, leasing was introduced by international brands such as Avis Rent and Europcar. From the '80s onwards there was a real explosion of companies engaged in offering long-term rental services alongside the more traditional leasing companies.

Political key info

The official name of the country is the Italian Republic.

Italy is a constitutional republic. The constitution - a set of 139 articles which establish the basic ground rules of society - came into effect in 1948.

There are three branches of power in Italy: executive, legislative, and juridical. Italy's parliament is made up of two houses which both have equal power: the Chamber of Deputies (or Lower House) and the Senate (Upper House). The Chamber of Deputies has 630 members, and only Italian citizens aged over 25 can stand for election. The Senate has 315 elected members, who must be at least 40 years old to stand. In both cases, members are elected for 5-year terms, which can only be extend if Italy goes to war.

The president (currently Sergio Mattarella) is the head of state, though this is a largely ceremonial role. The president of the Council, more commonly known as Prime Minister (currently Paolo Gentiloni). Two months after inconclusive elections in March led to political deadlock, president Sergio Mattarela has called for a fresh round of consultations in a last-ditch attempt to get the parties to agree a deal to form a government. The 4 March result saw a coalition led by the League (La Lega), a far-right party, win the biggest share of the vote – 37% – and the populist Five Star Movement (M5S) emerge as the biggest single party with 33%. The deeply divided centre-left Democratic party had its worst-ever performance with only 18%. The premier-designate (Giuseppe Conte) received a mandate from President Sergio Mattarella to try to form western Europe’s first populist government. The political freshman was the compromise choice of the eurosceptic 5-Star Movement and League to break more than two months of political deadlock after inconclusive elections.

Inflation

0.5%

Chapter 2 : Automotive market, segments & sales

Total Car park
Total number of vehicles 51,448,065
 Cars 38,762,529
LCV 4,955,556
Trucks 635,001
 Motorcycles 7,094,979

 

 Average age : 9.6 years

New vehicle registrations (Cars, LCV, Trucks)
Total registrations 2,441,963 vehicles
 Cars 1,994,207
LCV 208,385
Trucks 34,442
Motorcycles 204,929
Top 5 brands (total market)
  1. Fiat 402,355 + 4.39%
  2. Volkswagen 144,825 +4.06%
  3. Ford 134,073 + 7.84%
  4. Renault 133,666 + 12.99%
  5. Peugeot 104,222 + 10.72%
Model preference top 5 (total market)
  1. Fiat Panda 145,919
  2. Lancia Ypsilon 60,321
  3. Fiat Tipo 56,046
  4. Fiat 500 53,960
  5. Renault Clio 52,618
Dealer network (including fleet dealer network)

2,500

Used car market/renewal cycle

4,943,490

Tenure of first owner of cars is estimated at 8,2 years

Chapter 3: Company car market

Total Fleet Park (company cars)/Fleet penetration in total fleet sales

768,462  cars (2017): 43.6 % of total

Evolution fleet sales (last 5 years)
2017 768,462 cars
2016 688,586 cars
2015 568,085 cars
2014 508,232 cars
2013 471,663 cars
Top 5 fleet brands (fleet market)
  1. Fiat
  2. Volkswagen
  3. Ford
  4. Audi
  5. Mercedes
Fleet Model preference top 5 (fleet market)
  1. Fiat Panda
  2. Fiat Tipo
  3. Fiat 500
  4. Fiat 500X
  5. Fiat 500L

Chapter 4: Taxation & legislation

4.1. Car Taxation

According to the Italian law, the following taxes/fees are due with regard to cars:

  • Value-added tax (VAT);
  • Provincial registration tax (Imposta provinciale di trascrizione)
  • Regional motor vehicle tax.

Value-added tax (VAT)

Deduction

VAT deduction rules depend on how the car is used by the taxable person or by the company's employees. The VAT deduction is limited to 40% if the taxpayer effectively uses the car for both business and personal purposes. In any case, the provisions of non-deductibility are not applicable to vehicles that are the object of the business activity or used by representatives and sales agents.

Car for private use

According to Italian VAT laws, supply of services carried out for private use or tor aims unrelated to the business purpose is subject to VAT. In such a case, it the VAT incurred on the costs sustained for their supply is deductible and the transaction has a unitary value higher than 50.00 EUR, the supply must be taxed based on the costs incurred.

This provision is not applicable in case of private use of the vehicles or if the vehicles are placed at employee's disposal for free, provided they have been purchased with a limited VAT deductibility of 40%, Ii.e., no "self—supply“ has to be carried out].

The rationale behind is that the private use or the use for aims unrelated to business purposes is taxed through the partial VAT non-deductibility on purchases.

Cars put at employees’ disposal for consideration

Regarding employers who allow employees to use a company car while charging a certain amount (sub-rentals), for example by retaining a sum from the monthly salary, these vehicles are deemed to be used exclusively in the course of business and the related VAT incurred by the employers is deductible.

Regarding sub-rental to employees, if this is lower than the fair value, the taxable basis of the provision of the employee with the car has to be at least equal to the amount equivalent to such a value.

Supply of cars

Regarding the supply of goods (vehicles included) whose purchase or import VAT deductibility was limited, the taxable basis for these is limited to the deductibility rate applied to their purchase or import. Consequently, the taxable basis of the supply of vehicles whose purchase or import VAT deductibility was limited to 40% is likewise limited to 40% of the consideration.

The supply of second-hand vehicles is subject to the margin scheme in certain cases.

Provincial registration tax (Imposta provincial di trascrizione) - Taxable event

The provinces can levy a tax related to all the formalities concerning the car registration into the Public Car Register (PRA), applicable for the province territory, by issuing a regulation. In case the STA procedure is not applicable/possible, the registration can be obtained by the traditional procedure, i.e. once applied for the car registration before the Traffic Authority (Motorizzazione Civile) within 60 days from issuance of the circulation card, the vehicle has to be registered in the Public Car Register.

Tax due

The provincial registration tax (lmposta provinciale di trascrizione) is €150.81 for cars with an engine power of up to 53kW. If the power is over 53kW the tax is calculated by multiplying €3.51 by the total kilowatts. Each Provincial Public Authority has the faculty to increase the aforementioned rates by up to 30%. Moreover, there are some additional limited fixed fees related to the ACI intermediation and for stamp duties related to the vehicle registration. Acts relating to vehicles adapted to persons with certain disabilities are exempt from IPT payment.

Tax period

The tax is due at the time of any registration of a car or subsequent transfer of ownership.

Regional motor vehicle tax - Taxable event

Motor vehicles registered in Italy are subject to a yearly regional tax calculated on the basis of the engine power expressed in kilowatts. The number of kilowatts is mentioned on the circulation card.

Taxable due

The tax rates depend upon the region of residence, the car engine power and the polluting emissions level according to Euro standards laid down by EC directives relating to measures to be taken against air pollution by emissions from motor vehicles.

A fixed fee of this variety for a Euro 0 car is equal to €3.00 up to 100kW and €4.50 for each kilowatt exceeding 100kW. Some exemptions/reductions are foreseen for particular kind of cars. Since January 2002, cars with an engine power higher than 185kW have had to pay a surtax in addition to ordinary regional motor vehicle tax of €20 for each kilowatt in excess of 185kW. This surtax is reduced after 5, 10 and 15 years after construction of the vehicle, respectively for the A0, 70 and 85% of the total amount due. After 20 years since the construction of the vehicle, surtax is no longer due. According to art. 1 co. 38 of Law no. 232 of December ii, 2016 (Stability Law 2017), companies with fleets of cars and trucks, which are owner, beneficial owner or user by way of leasing may choose to pay the regional motor vehicle tax cumulatively for all their vehicles.

Tax period: Yearly

4.2. Income tax – Taxable persons

Level of deduction of car-related expenses

For income tax purposes, limits to deductibility of car-related expenses are laid down by the Italian Income Tax Code. Car-related expenditure covered by this regulation includes vehicle purchasing costs and, consequently, depreciations; the cost of hiring, renting or leasing; vehicle re—fueling costs; spare parts costs; vehicle usage, custody, maintenance repairs and other services costs, including non-recoverable taxes and insurance.

Two factors affect the deductibility of car—related expenses:

  • The activity carried out by the company
  • The car use

In terms of engine power and weight, even if the vehicle is registered as a lorry, they are considered cars for tax purposes. It is an anti-avoidance rule that aims to stop certain car registered as lorries (e.g., SUVs (from benefiting from the better tax treatment granted to lorries, i.e. full deductibility).

Full deductibility

Full deductibility of car-related expenditure is allowed in the following circumstances:

  • Expenditure related to cars whose use is "exclusively instrumental" to the entrepreneurs activity (e.g. cars used by car rental companies, driving schools), or whose production or trade represents the company’s business (e.g. car dealers).
  • Expenditure related to cars used for supplying a public transport service (e.g. taxi)

Partial deductibility

  • Cars not granted to employees of granted to employees solely for business use Expenses incurred by a company for cars that are not allocated to employees or granted to employees solely for business use are deductible only up to 20% of the amount relevant for tax purposes. This percentage grows to 80% for business agents and commercial representatives (hereinafter as "business agents“) enrolled in business agents registers held by local chambers of commerce.
  • Cars granted to employees for both business and private purposes for more than half of the fiscal year. For company cars driven by employees for both business and private purposes for more than half of the fiscal year, a 70% deductibility of related expenses is granted without any limit.
  • Cars granted to employees for both business and private purposes but for less than half of the fiscal year

For cars granted to employees for both business and private purposes, but for less than half of the fiscal year, the related expenses are 100% deductible to the extent of the amount regarded as a benefit in kind (fringe benefit), taxable at the employee's level. The amount exceeding the fringe benefit is deductible only up to 20% of the amount relevant for tax purposes.

  • Cars granted to employees exclusively for private use

For cars granted to employees exclusively for private use, the related expenses are 100% deductible to the extent of the amount regarded as a benefit in kind (fringe benefit), taxable at the employee's level.

  • Cars granted to directors

In case of cars granted to directors, the deductibility of related expenses is determined by the use of the cars. For a car granted to a director for his exclusive private use, the related expenditure is 100% deductible to the extent of the amount regarded as a benefit in kind (fringe benefit), taxable at director's level.

For a car granted to a director for business and private use, the related expenditure is 100% deductible to the extent of the amount regarded as a benefit in kind (fringe benefit), taxable at director's level.

Deductibility is allowed since the expenditure is deemed to be a labour cost.

For the amount exceeding the fringe benefit, the deductibility is limited to 20% of the amount relevant for tax purposes. For a car granted to a director solely for business use, up to 20% deductibility is allowed of the amount relevant for tax purposes.

4.3. Company car

Generally, under the Italian personal income tax (IRPEF) and social security laws, goods, services and benefits received by an employee, free of charge or at a price lower than "fair market value", are treated as benefit in kind (fringe benefits) subject to the employee's personal income tax.

The amount of benefit in kind subject to an employee's personal income tax and social contribution is equal to the fair market value of the right, service or good received (net of any amount charged by their employer). Despite this general rule, the benefit in kind received by an employee in connection with a car granted to him is determined according to different criteria related to the kind of use that the car will be put to (resulting from proper supporting documentation, such as a specific provision of the employment contract).

For a car granted to an employee for their sole private use, the taxable benefit in kind received by the employee follows the general rules, being equal to the market value of the goods and services received.

For a car granted to an employee during the fiscal year for both his business and private use (uso promiscuo), the taxable benefit in kind is a lump sum computed as 30% of the "average cost of use" of the car, based on an annual mileage of 15,000 km.

The “average cost of use" of the car is determined by official schedules prepared by ACI (ltalian Automobile Club) and published annually. These schedules provide, for each existing car model, an average cost of use (including car depreciation, fuel, oil, tyres, etc.) per kilometer.

The resulting amount is calculated on a yearly basis. Accordingly, the benefit is calculated for the fraction of a year corresponding to its period of use. The use of a company car for the journey to and from the workplace is deemed a "private use".

4.4. Income taxes – drivers’ personal taxation

Private use

The vehicle costs incurred through private use of a vehicle are not deductible in the employee's personal tax return.

Business kilometers

The expenses refunded by the employer to the employee for the private car (or car hired directly by the employee) used for travelling out of the municipality where the work is usually carried out are not taxable in the employees' personal tax return and are deductible in the employer's tax return up to the limit per single kilometer cost relating to vehicles having maximum of ‘17 "fiscal horses" (or 20 if the car is diesel) stated by the official schedules prepared by the Association of Car Drivers (ACI).

4.5. Electric vehicles

The Italian Authorities provide for some incentives for the purchasing or leasing of electric vehicle.

The incentives are granted for purchase or lease carried out until December 31, 2016 and if certain conditions are met. 

Total EV and hybrid sales are not considered a real market as they don’t cover more than 0.9%. (with 0.1% registration in 2017). Toyota is leader company for hybrid vehicles. The French group PSA is the leading car company for electric vehicles sales. In spite of these low numbers, Italy can be considered an interesting market for electric mobility. There is  high percentage of vehicles/inhabitants (on average 65 cars per 100 inhabitants), a suitable environment with small cities, few metropolitan areas that are very crowded and they are not very extended.

With an estimation of 160/220 km range, almost all vehicles could suit the daily mobility of private and some types of business.

Italy can be considered as the 5th European country for future infrastructure charging points market, that is the anticipating business for EV market. There are many forecasts published in the recent few years and we wouldn’t enter into comments on that area, as they are similar to International forecast. Typically it is presumed that 4% of total car market will be of EV vehicles by 2020. It is more interesting to estimate market growth after incentive law. These years will be necessary to build the infrastructure network, for charging points and for cultural development too.

4.6. Future developments

Italians think that in 15 years they will be able to travel with long-distance electric vehicles with no autonomy problems (76% vs. 73% of the European average) who will leave their car at the entrance to the city and will use only public transport accessible where they parked the car (75% against 70%), that vehicles will no longer issue greenhouse gases (70% vs. 68%).

They are moreover convinced that they will be able to travel without risk of accident or breakdown due to new digital technologies (62% vs. 57%), and electric cars will reload during transit (67% vs. 55%) or, moreover, that it will be possible to travel with autonomous cars on restricted lanes (58% vs. 52%), even on all roads (51% versus 46%). For the vast majority of them, there is no doubt: these innovations will have a positive impact on their daily lives (81% of Italians think it against 77% of the European average).

Italians are demanding more digital services to help them find more rapid information on transport availability and the ability to build complete travel routes with integrated payment solutions. The question is, it's a bidding programme.

4.7. Legal background (import taxes)

  • CIT legislation (the CIT Law in particular)
  • VAT legislation (the VAT Law in particular)
  • Local tax laws
  • Excise Law
  • Accounting Law
  • Traffic Law

Chapter 5: Car policies

5.1 Company car entitlement

The new Company Car Policy aims to ensure and guarantee the maintenance of an appropriate car quality level in terms of safety and comfort, in order to best respond to the users’ requirements in carrying out their work duties and use for personal reasons. In order to make the type of cars assigned more homogeneous, sometimes there are “bandings” which identified associated with the “banding organisational clusters”. The company car entitlement, based on the relevant banding, is defined and well known by HR. The car models will follow the criteria of economy of scale and of the rental costs, by model, that are most economical given local market conditions and the tax regulations in force in the country. The user will be able to choose his/her preferred model from those specified by the relevant banding. It is in any case possible to opt for a model from a lower banding; this possibility shall not entail additional benefits to the basic standard offered (e.g. free additional optionals etc.). It is furthermore possible to opt for a capacity/outfitting downgrade/upgrade, limited to the model which has been assigned. It is not possible, on the other hand, to choose models from a higher banding. it is understood that it may become necessary to allocate cars that have become available due to circumstance, including those of different brands or models. Banding and car industry segment tables, regulatory and tax conditions and mixed-use procedures will be the object of specific local procedures that will follow the general outline of the guidelines set out in car policy.

5.2 Which sectors provide most fleet cars?

Entities liable to VAT, but two other sectors are growing: private individuals with tax code, of which there are already thousands, and light commercial vehicles (LCV). The latter in particular had a very good year, with the fleet increasing to 18.5% thanks to 30,000 more managed vehicles and 433,902 new registrations for lessors. In the previous three years, there was an increase of just 7,000 additional units. For LCVs there are further growth margins on the horizon, especially in view of the development of e-commerce, which moves the last mile from the customer to supplier: If yesterday, most of the items on sale were brought by the buyer from the home store, tomorrow this will be carried out through a LCV.

5.3 Which job functions often include a company car

Sales representatives, consultants, executives

5.4 Which reference car(s) is given to:

  • Entry/junior sales level: diesel engine with range of displacement 1.3-1.6 l
  • Senior sales / management level: diesel engine with range of displacement 1.7-.2.0l
  • Executive level: diesel engine with  range of displacement 2.0-2.2l and luxury outfitting

Chapter 6: Funding methods

Overview of penetration of funding methods (buy or lease)

Lease is the rule in Italy for companies. This includes long-term rental or leasing of vehicles, sectors that grew 18.2% compared to 2016. The main funding options used in Italy are now: lease (with little differences) and purchase, while the driver-funded (as car allowance) has become less important because of excessive taxation.

The main funding method in Italy is long-term rental with more than 80% adoption.

For the year 2017, the 2017-2019 budget law confirms the super amortisation at 140% of 2016. A bonus that could prove useful to rental companies and also beneficial to the customer as it did 2016. This bonus allows you to benefit from an increase of 40% of the tax cost of investment in instrumental assets for deductibility with amortisation. In other words, if a company buys a good and pays it 100, the deductible cost for the amortisation is 140. The cost, including the increase, must then be subdivided into annual constant rates according to the category coefficient. The taxpayer can therefore deduct depreciation rates to a greater extent.  In 2017 the bonus is intended for the purchase of new instrumental assets linked to the core business, so those assets acquired in property or financial leasing are excluded for non-instrumental use.

In 2016 and 2017, the bonus had the impact of contributing to lower taxation for rental companies, thus resulting in numerous benefits for the car rental company and the end customer. For example, many car rental companies have contributed significantly to the renewal of the fleet, a 17% increase in registrations. On the other hand, although the bonus does not involve them directly, many car rental companies have decided to override the tax advantages of rental rates by offering more affordable services to a larger audience. Though long-term leasing is more aimed at private companies, but in the last 3 years, this slice of market has grown by 300%, surely the super depreciation can significantly contribute to this growth.

By widening the issue of operational renting, the improvement margins are interesting, super-amortization certainly has the merit of activating that virtuous circle to foster the technological renewal of Italian industrial fabric, mostly composed of small and medium-sized companies equipped with plants and obsolete machinery. No doubt: in Italy the founding method is Long Term Car Rental.

Type of suppliers (captive versus multibrand, international versus local…)

Property fleets dropped by 1.8% (2017). The real protagonist of the car market is once again the long-term rental, which continues its favorable trend: + 18.2% (2017). Among the Long Term Rental distributor categories, in 2017, "captive" operators (controlled by carmakers) made a remarkable leap forward: + 17.7%, while the "Top Generalists" (+ 18.7%).

2018

Yes to super amortisation, but only for commercial vehicles purchased by the rental companies: this is what is established in these days by the Budget Law 2018. Certainly good news for the sector, even if, as we had predicted a few weeks ago, the cars do not they have been included in the tax benefit. Green vehicles were excluded from the super amortization: a measure that does not help the increase in the number of these vehicles.

6.1 Outright purchase

Definition

Given that the tax variable and deductibility of a company car should not be the only parameter to consider, we analyse what is the treatment and therefore the convenience of the various forms in which a business car can be held. Fleet funding and taxation are two areas that should be considered in unison simply because different tax treatments apply to different funding methods. The cost of funding can only therefore be accurately predicted if the relevant tax treatment is considered for each form of funding.

Pros and cons

The fleet trend in Italy is to change from property to Long Term Car Rental (property now has decreased less than 12% of the market, but at the moment is the second funding method, while the other are really “marginal”)

Economic & legal ownership

Article 164, paragraph 1 b) of the TUIR, contains the discipline of vehicles called so-called "limited deductibility", which provides for a twofold limitation:

  • a reduced percentage of deductibility of 20%;
  • Limit to the fiscally recognized value of the means.

In the case of purchase, the rule provides for a limit to the fiscally recognised differentiated value depending on the type of means of transport:

  • €18,075.99 for cars and caravans;
  • €4,131.66 for motorcycles;
  • €2,065.82 for mopeds.

6.2 Renting (Finance lease)

Consider that in Italy this funding method is about 2% of the market.

6.3 Full service leasing (operational leasing)

Consider that in Italy this funding method is about 2% of the market similar to the previous funding method.

6.4 Fleet Management

Italy - Specialists fleet management and fleet administration continue to be few. The solution market for fleet management is less than 3%.

6.5 Short term rental

In Italy, it is a solution used only for employees  without fleet car assigned.

The short term car are sometimes used by Rental Company for replacement cars or per-assignation. The short term segment in 2017 increased (+8%), even if the private segment is decreased by 1,26%.

6.6 Other funding methods

Long Term Car Rental is the method used in Italy, with different service level agreement. The Italian market is not ready to other method, due to the current tax system.

The Long Term Rental is trying to attract the private environment, but the taxation and the initial investment from the private customer aren’t encourage them to make this choice.

Chapter 7: Fuel

Fuel type segmentation

In Italy 11.6% of new registrations are "alternative" cars. Petrol and diesel crumble. Italy is the only major European countries in which the sale of all types of fossil fuel has dropped during the first five months of the year. The 2017 data from up (Unione Petrolifera) for the first five months of the year show that petrol and diesel consumption in Italy was 30.3 million tonnes, down 1.8% to about 557 thousand tonnes over 2016. Petrol suffered the most important decline, up 4.1% to 312,000 tonnes less than sold. Diesel, on the other hand, lost 1.1% to about 245 thousand tons less than in 2016.

Fuel price evolution

Italian households and businesses spent €53,3 billion in 2017 to buy peptrol and diesel fuel (63.5% taxation). Compared with the same period last year, there was an increase of 5.3%, corresponding to a higher expenditure of 2.68 billion, despite the fact that consumption fell 1.9%. Growth in spending was due solely to the price trend at the pump. For petrol, the weighted average price went to €1.528 per litre in 2017 (+5.9% y-o-y). Even higher is the increase for car diesel. The average price has gone to €1.383 (+ 8% y-o-y).

Fuel prices are made up of two components: the industrial component and the tax component. The industrial component goes to the oil industry and its distribution network. The tax component, on the other hand, leads to substantial resources for the state.

The growth in fuel prices is closely linked to the price of crude oil, and consequently the most important part of the increase in spending goes to the industrial component.

In 2017, the expenditure in petrol and diesel has increased by 2.7 billion. The royalties paid by oil companies in 2017 have more than halved compared to 2016. A collapse of 56.4%, thanks to the decline in the national production of hydrocarbons (-12% of gas and -31% of oil), the stop of 5 months in the Lucanian field of Val d'Agri (following the investigation by the Potenza prosecutor with the seizure of the Cova from March 31 to mid-August 2016) and the sharp drops in the price of crude oil. The result is that, if in 2016 the oil companies paid about €223 million of royalties, this year the payment was just over €97 million. Almost 126 million less in the coffers of State, Regions and Municipalities of the mining areas and also fewer resources destined to feed the National Economic Development and Social Card Fund and the Environment and Health rate.

Fuel infrastructure

The number of outlets is 22,900, which is much more than there are in other European countries. Unfortunately, in Italy it is also difficult to know exactly how many plants there are. The Office of the UTF (Finance Technical Office) mentions over 24,000, while Fenica - the trade union cluster headed by Cisl - has also done research, counting the sales outlets reported by the nine major companies: the sum is of 21,600, and the companies are not all, and they also lack important ones. In short, from this seemingly trivial point of view, the world of distributors looks like a nebula. Apart from the much higher number of Italian distributors, the plants are better organised abroad. From a technical point of view, the self-service system is generalised, while in Italy only 33% of the plants work this way. From the economic point of view, in the rest of Europe service stations accounted for 70-80% of turnover with activities other than the sale of petroleum products, while in Italy the plants carrying out these activities are only 15%. This reality contributes significantly to keeping fuel prices high and that a reduction in the number of distributors would reverse the trend. In this regard, it should also be noted that in the large service stations that offer many products and services, the price of fuel is nothing more than a shred of convenience, while to offer lower prices are rather small "white pumps", i.e. distributors not belonging to the networks of the companies, which obviously have different costs.

Fuel card solutions

For professionals who use the car as a work tool and for fleet managers, fuel cards are certainly not new, since almost all the operators in the industry are offering it to business customers. The range has been further expanded thanks to the white pumps, which are organising to have their own fuel cards. These pumps are mostly in limited areas and therefore they are more often used by private customers. If the fact that independent fuel carriers are valid only in the areas where they operate can be penalised for those traveling on long journeys, it should be noted, however, that there are already some international fuel cartridge cards that can also be used with many pumps white (i.e. DKV).
Since the services offered and the characteristics of the cards evolve quickly to be in line with the needs of customers and companies, it is worth drawing a picture as complete as possible of the current fuel card offering, useful not only to workers but especially and above all to the companies that use them to manage their fleets in the best possible way.

Legislative issues for the fuel card in Italy

To date, supplied by the oil companies or indirectly by the charter company, the Fuel Cards are the commonly used fuel used in Italian car fleets.
Electronic fuel invoicing is a new obligation in 2018 as a result of the new Budget Law 2018 starting from 1 July  2018, the obligation to issue electronic invoicing for the supply of petrol and fuels in general is triggered, while the obligation of electronic invoice among private individuals 2019 starts on 1 January next year. The Italian Revenue Agency with circular 8 / E of 30 April 2018, has taken steps to issue the first clarifications on the new obligation of electronic invoicing from 1 July 2018 with regard to the sales of motor fuels, petrol or diesel, and for the services rendered by subcontractors and subcontractors in contracts for works, services or supplies to the Public Administration.

Chapter 8 : TCO components

The TCO cake is well known by Italian fleet managers:

Of all European countries, Italy (27%) rank lowest in depreciation cost. The low depreciation costs in Italy are mainly due to the Italians' inclination to drive small cars (see chapter 1 of this document, where the Fiat Panda is the best seller), equipped with basic equipment (add-on included), making these cars cheaper and decreasing depreciation costs.

The TCO includes direct fleet costs, made up of depreciation, interest, vehicle repair and maintenance, tyres, fuel consumption, insurance, tax and fleet management fees. The big problems to understand the indirect fleet costs which are often harder to quantify, but have a significant impact on the total cost of your fleet. These include e.g. time spent on fleet management processes and administration and employee productivity factors such as driver downtime and motivation.

Maturity of TCO usage

The TCO dates back to 1987 (Gartner): it is mature. The new edge is Mobility, so it’s important to move from TCO to TCM (Total Cost of Mobility). However, with the rise of services such as car sharing and ride hailing, many people in cities in particular are predicted to increasingly choose to use these services rather than own a car. Hence for such vehicle users, the Total Cost of Ownership model will change in TCM with the request to encourage developers and property owners to implement sustainability.

Chapter 9: Safety, insurance and telematics

Accident rate and evolution

 In 2017, 165,050 (-5.7% y-o-y) road accidents occurred in Italy with injuries to persons causing 3,512 (+7.1% y-o-y) deaths (dead within the 30th day) and 249,175 injured.
The data from ISTAT (National Institute of Statistic) are not fully available for 2017.

Safety and evolution

Road safety in Italy for the first time in ten years has worsened, especially for motorcyclists and pedestrians. In addition, between the ages of 18 and 24 the driving mortality rate is twice as high as the average. While the number of casualties amongst older people (over 65) increases by 3%. These are some of the data from the OCSE in the Italian focus of the annual report on "Road Safety" just published.

In 2017, the last year of monitoring, Italy saw a rise in road deaths of + 7.1% with 3,512 victims, a figure below the average OCSE (the average increase was 3.3%) but with a mortality rate higher than the EU28 average. The number of seriously injured people also increased by 6.4%. Deaths and injuries that have had a human cost but also economic, with a total estimated impact of €17.5 billion.

The 10% of accidents would be alcohol-related, but the number of drunk driving fines is declining. It does not diminish the use of mobile phones to guide. In Italy, about 5.1% of drivers use the cell phone without a headset while driving and there were about 150,000 fines written for this reason. Fatigue and drowsiness would explain about 22% of road accidents. It is worth mentioning the very serious fact that only 43% of motorists use restraint systems for children. The number of road deaths is disproportionately high and not in line to reach the European goal of halving the number of road deaths by 2020. This is worrying considering the increase in mobility.

The causes are mainly to be found in the deterioration of road and highway safety (+ 6.3% of the dead) and rural roads (+ 2%). Overall, the number of deaths has decreased slightly on urban roads (-0.2%), but the bigger cities are killing more. In fact, the number of deaths in the 12 major Italian cities has increased considerably (+ 8.6%). Among the problems reported by the OCSE report is the greater exposure in terms of distance travelled, the widespread use of road transport. The car continues to be the preferred means of transport and in 2016 it covers 82.8% of the routes carried out, compared to 13.4% of buses and 3.7% of the two drive wheels. But the Italians also start to love the pleasure of walking and even the use of public transport is on the rise. Walking miles have gone from 14.3% to 17.1%.

Insurance offers (calculation) and suppliers

There is no shrug to keep when it comes to fighting the tough road safety struggle. A plague that in Italy cuts human lives and exerts heavily on the accounts, with the growing insurance policy, forced to cope with an increasing phenomenon. 

The telematics insurance market in Italy already stands at 15% and projections indicate that in 2020, digital car insurance could account for up to 27% of the car insurance market. Digital car insurance is set to become an important offer in all European countries: Italy and the United Kingdom, which are already leaders in telematics products.

At present, the price is the main argument for telematics sales, which continues to make the auto insurance product a low-differentiated consumer product. Discounts are used as the main incentive for communication, while value-added services are rarely introduced in companies' offerings. As a result, many countries are taking the time, as the introduction of a telematics offer could also lead to a decrease in premiums for certain customer groups. Rental companies often do not work in self-insurance and this does not allow to differentiate the product, which is often embedded in other services.

The digital policy will undoubtedly become the future, but in the case of long-term car rentals, at least in Italy, the insurance product is often outside the fleet manager's perimeter.

Telematics availability

From the earliest times during which traceability and traceability systems were adopted through the installation of small black boxes that were used solely as a means of controlling movable property, the systems have evolved to a level that currently allows drivers to obtain real-time feedback on their performance and their driving style. The “Big Brother” is not watching us anymore. Instead, advanced fleet management systems are becoming an increasingly important tool to help drivers perform their tasks at their best, with less stress and greater safety at the wheel. As a result, businesses are also increasingly technological, increasing efficiency and productivity, in order to achieve a return on investment between nine and twelve months, with peaks in some cases of up to three months.

However, the potential of fleet management technology is largely unused. The market is growing rapidly, but penetration is currently about 20% for commercial fleets and 40% for freight fleets. The biggest challenge for the industry comes to helping businesses, enabling them to fully understand the chances that these systems offer in the long run, even though telematics has already left its mark day by day in our lives, significantly and in diversified. Often, all this can happen so that the public is not even aware of it. When consumers receive a parcel or organise a business visit, fleet management technology can be crucial to ensure that this happens at scheduled times. Similarly, if you are standing at the bus stop and you look at the electronic display to check when the next bus goes, you will benefit from telematics. A myriad of companies in different industries and industries use this technology to keep full control over the mobile workforce's business, ensuring that service goals are met and improving workflow planning. Just as the approach of companies to telematics is rapidly developing, they are doing their applications as well.

Another factor that drives the adoption of telematic solutions, perhaps inadvertently, is the rhythm of technological innovation in the consumer industry. Progress is taking place at an ever-faster pace, making devices such as smartphone and tablet integrated business tools. Many journalists have represented mobile devices as a threat to existing navigation and fleet management solutions, but if opportunities are fully exploited, these considerations will be far from reality. We cannot refuse or ignore these devices and we do not want to do so. Smartphones can work hand in hand with the advancement of telematic technology to create a homogeneous IT operation that involves all aspects of life, from home to business, from car to free time. This kind of integration is what the future wants. Imagine a situation where you are booking a meeting with a businessman, and then you receive an SMS on your cell phone that indicates exactly when the representative will arrive at the appointment. Not only that, but the device can also tell exactly how long it will take to get home to meet the business, offering the best possible route, which takes into account traffic congestion at that time. Rather than waiting for a business to arrive, then you will only be able to go home when absolutely necessary, allowing you to maximize working time or free time. Further expanding the idea, deliveries could be made directly to the exact location of the customer at that time, identified by the GPS signal sent by his smartphone, whether at home, at work or even at the restaurant. Such developments are already within reach, but major commercially-advancing efforts are still focused around driver feedback, ecological driving, fuel management and corporate property management. Systems are currently able to analyze the driving style and provide real-time feedback or historical reports for both drivers and drivers. The navigation system, while managers can set performance standards at the company level, in order to establish a safer, more environmentally friendly, and more fuel-efficient driving style. Savings and its earnings mean that this has become an important engine for technology adoption by businesses, but there are still a virtually unlimited number of progress to achieve. Maps that provide accurate metric accuracy per hour, hour by day, would allow behavior tracking systems to become even more intuitive, so that the braking system could react automatically if it was detected that the driver is going too fast on a certain section of the road. For example, the telematics system might be able to automatically know if a 90 degree curve is approaching and in 200 meters the speed could be adjusted accordingly if the driver did not correctly assess the severity of the turn. Likewise, the system could provide assistance in cases where traffic was rapidly congested, enabling improved driver and vehicle safety, and assisting it in a more fluid and efficient driving style.

In the long term, this seems to be a significant step towards self-piloted cars, but in the short term could lead to more sustainable public transport methods, helping tackle congestion and urban planning issues. Common complaints about buses or trams, described as narrow and overcrowded, can plausibly be avoided through the provision of automated travel trails. For such tracts the vehicles would not need to be driven by a driver, nor would they have a fixed trajectory. Instead, dedicated lanes should be provided within cities and it would be desirable to rely on precise GPS and detailed maps of details to guide them in front of curves or obstacles. If the maps are updated minute by minute, some traits may be hijacked to circumvent accidents, work in progress or intense congestion, improving the reliability of public transport through telematics support. Each automated transport user may be provided with an identity card containing relevant information, such as the residential and professional address and travel times. The user can then take advantage of the medium at the right place and at the right time, crawling the card as a payment instrument and directing it to the required destination. Increased transport density would mean less congestion problems and a reduced need for parking, which could ease space problems in major cities. Users would be able to pay more for private transportation and could also use their personal card to access audiovisual content that pertains to their needs and interests during travel. Meanwhile, however, fleet management technology will continue to function as an important force for companies using a mobile workforce that are eager to improve efficiency, productivity, and customer service. Historically, telematics has been too often accused of offering little to drivers, but the latest solutions enable managers and employees to work together more effectively to elevate standards across the board. And we are not at the limit of technological development because these standards will continue to rise as systems become increasingly sophisticated day by day.

Chapter 10: Environment

Trends in taxation, legislation and city restrictions (CO2, diesel… )

The tax system on the automobile needs to be reviewed in the state and local sphere. There is a need for an organic plan, considering the development of new forms of mobility, of exponential growth of transport and transfers, inter-modality always most demanded by businesses and citizens. Not to mention the use of fuels and vehicles a minor ecological impact, in view of a particularly important tax review environment, as is the case in 20 EU-28 countries, which already apply forms of taxation on emissions. In addition, of course, it will be a logic-based remodelling of logic “Pay as you drive”, connected to the use of the vehicle, in a logic of consumption sustainable and development of telematics applied to transport and the world of insurance.

CO2 figures availability

From the National Inventory Report 2015 and from the United Nations Climate Change Forum we can draw some useful context information to these numbers. The choice of 1990 as the starting year is no accident: since the Kyoto Protocol, signed in 1997 and ratified by Italy in 2002, is the base year with which emissions comparisons are usually made. The main greenhouse gas, CO2, accounts for 82.4% of total emissions in Italy (though expressed in tons of CO2 equivalent). Between 1990 and 2013, CO2 emissions dropped by 17.4%.

From 2013 to 2020, EU states have agreed to reduce emissions by a total of 20% compared to the 1990 base year. Italy is aligned with the target: cutting 20% of emissions thanks to 20% of renewables and 20% of energy efficiency.

Green vehicles (new powertrains)

On the engine side, a trend reversal is observed compared to 2016 between diesel and petrol registrations. In 2017, gasoline cars grew more than diesel (+ 47.2% market share vs. 43,9%). Other AFV are 8.9%: in this part the biggest one is LPG (6%).

Chapter 11: Mobility

Hours (for one year) spent in congestion in Italy in 2017: (source Inrix-Rapporto Traffic Scorecard)

Rome 39 - Milan 39 - Palermo 24 - Turin 24 - Florence 23 - Bologna 20 - Varese 19

Italy has shown signs of economic recovery, with a 1.5% increase in GDP and business confidence. While the unemployment rate fell to 11%, down from 11.9% in 2016 , youth unemployment level is at 31.7% . Despite the moderate growth and the 16% increase in the number of car registrations in 2015, traffic in Italy continued to decline, partly due to the growth of the car sharing economy. Car rentals have risen by 18.2% in 2017 in Italy and vehicles purchased for rental purposes account for about 42,5% of the total market.

Mobility conditions for employees

Italians take too much time to move around, criticise public transport and demand more intermodality, are dissatisfied with traffic, but still predominantly choose the car for daily trips, whether going to work, spending or bringing children to school. 73% of Italians, however, would be willing to reduce the use of their cars if the necessary investments were made, and that is why they demand more investment for intermodality (72%). 81% of Italians, then, think that future innovations in the mobility sector will have a positive impact on their daily lives.

Italians spend on average 10 hours and 40 minutes a week (Monday to Friday), which is 1 hour and 5 minutes more than the average for Europeans (who spend 9 to 35 minutes). In Italy, like in other European countries, the car is an indispensable means of transport, almost all of the daily journeys: whether to go to work or study (69% vs. 61% of the European average) go to "big" (86% vs. 73%) food expenditure or accompany children to their daily activities (64% vs. 56%). Together with the Greeks, the Italians more often use a two-wheeler to move around (6% use it to go to work or study, against just 1% of the Slovaks, for example). The supremacy of motorised transport (stronger in Italy than the average of European countries) is due in particular to the fact that 43% of Italians (compared to 35% of the European average) are difficult to use public transport in close to home. In Italy, the three main reasons why public transport is no longer used are those quoted by the European average: their transit frequency is too low (46%), destinations not adequately served by public transport (39%) or, too, an excessive journey time (31%).

Italians, like other Europeans, think most of the public authorities are not investing enough in transport infrastructure in the areas they live in. Investments that are scarce tend to accompany new mobility (77% consider insufficient investments in the development of electric charging columns, compared with 74% of the average).

Today, the Italians are not very satisfied with their infrastructures, but regret the lack of smoothness. New technologies will allow the introduction of new habits. It is a fundamental priority of public policy.
Mobility is one of the few arguments on which all Europeans at the same time have strong expectations and real hopes for the future. Today, they want to have the freedom to choose, freer, playing on intermodality and using digital support services. For tomorrow, they think that current technological revolutions will greatly improve not only their mode of shift but also their level of well-being.

Mobility solutions (car sharing, taxi, Uber, carpooling…)

Taxis, Uber and Ncc (hire with driver). These are the subjects we hear these days since the government with the famous “Milleproroghe” decree, decided to leave things as they are, at least until the end of the year. Ncc, say taxi drivers, must be rented from real estate, must leave the garage and operate within the territorial boundaries assigned by the licenses. Then there is the question Uber, afflicted as another misleading competitor. Against this, car sharing did not even hear a voice.

Yet, looking at the numbers, taxi drivers should look at car sharing as their main competitor. Just have visual or direct experience and look at the numbers. Uber claims to have a thousand cars and that in the last 3 months there were 63,000 users who requested the service at least once, remembering that in Italy only high-end services are active, and not the ones that are competitive in the taxi fare. Infinite numbers in front of those of the largest national operator, 3570 in Rome: 3,700 taxis per 10 million services and 30,000 calls per day. We talk about just under half of all taxis in the capital, where daily car sharing is used 5,741 times (Urbi data) which, multiplied by 365 days a year, make nearly 2.1 million journeys per year.

For sure, between the two quarrels is the third one who enjoys it is car sharing. It says the market that grows, widenes and differs in spite of the latent legislator by allowing distortions which in the end are precisely those who refuse innovations to suffer the consequences. The responsibility of all this is not that of the legislature itself, which has allowed the consolidation of anti-competitive practices and secondary markets, but it is lagging behind in regulating the new forms of mobility which, in the meantime, have fallen into the interest of whoever avails it. How should a market worthy of this name be.

Meanwhile, car sharing is constantly expanding and is increasingly becoming a cross-cutting phenomenon. To confirm this is the data of Urbi, the app that aggregates the main urban and shared mobility systems: if it is true that the average user of sharing mobility is male (75% of the total) and is between 25 and 34 (34%), 14% are between 55 and 64 years and another 7% are over 65 years old. In 6 months, Urbi recorded 4.265 million reservations, 1.8 million hours of rental and 30 million km of routes, with a 35% growth.

Aniasa evaluates over 700,000 users of various services. The main ones are Enjoy, with over 500,000 subscribers, and Car2go declaring 343,000 while the last arrived in Italy, DriveNow, active only in Milan for now, claims to have 60,000 with 500 cars between Mini and Bmw. Enjoy has 2,170 cars, 900 of which in Milan, and 480 scooters, of which 300 are located in Rome. Other cities are Florence, Turin and Catania. Car2go, on the other hand, declares 2.070 smart, 800 of which in Milan and 600 in Rome. According to the first report on sharing mobility in Italy 2016, conducted by the Ministry of the Environment, there are active car sharing services in 29 cities with a fleet of less than 6 thousand vehicles. Nearly 2,000 are located in Milan, which is the Italian capital with 370,000 subscribers, followed by Rome (220,000). The most densely populated city is Florence, which can boast of 17 shared vehicles available every thousand inhabitants and 3.4 each working car. 98% of the total 700,000 are concentrated in 4 cities (Milan, Rome, Turin and Florence). The next challenge is to make comparable and up-to-date data: Aniasa, who has also received car sharing between the sectors represented last year, is working on us.

The industry, meanwhile, is undergoing the first "shake off". The most important are the expansion of GirACI, the company that heads Aci Global and recently acquired Genova Car sharing, and the entry of Europcar into the sub-fund, through the subsidiary Ubeeqo, which has taken over the Milanese GuideMi. It is the first time that short-term rental is straightforward, while it is already a partner of DriveNow (Sixt) and Car2go (Europcar). What is certain is that car sharing is a predominantly captive business by the big builders who see the bridgehead to enter the new mobility business. In addition to Bmw and Daimler, Volkswagen is ready with Moia, Peugeot with Free2move, Ford with Ford Pass and General Motors with Maven, a $ 500 million joint venture with the ride-hailing Lyft giant. Everyone points to the free floating car sharing that prevails in Italy. Different Toyota approach with Yūko ("let's go" in Japanese): here you look at middle-class, very Italian typologies, with a hybrid station-based fleet (7 stations and as many cars) aiming to provide extra-urban service among the 14 municipalities of the municipalities of Romagna Forlivo. Everything to see, however, what will happen with the spread of electric car sharing. In Italy, Share'Ngo and Blucar are already active, overseas Car2go already has 1,350 Smart Electrics. With the arrival of the new Smart EDs, things could also evolve from us, charging network permitting. The new mobility, after reviewing the idea of possession, is ready to take off.

DriveNow (BMW) and Cat2go (Daimler) are merged in a new company: in this way they can share not only cars, but debits. In the Italian context, we observe that car-sharing as a whole is still a loss-making business. The latest budgets of all four major companies in our market (Car2go, Enjoy, Drive Now and Share'ngo) report negative results and on average each car generates an annual loss of 4,700 euros.

Smart cities

There is a real project - Italian Smart Cities is the national platform promoted and realized by ANCI, which collects the design experiences implemented by the Italian cities in the smart optics. Within the platform, cities tell their innovative initiatives, the needs they are facing, the sustained costs, the impacts on the quality of life of people, and the replication conditions in other urban contexts.

The ANCI platform, based on the analysis work carried out by the Smart City Observatory, is an operational tool for mapping, collecting and cataloging project planning on smart cities across the country. It aims to provide support to Municipalities of all dimensions in terms of ideas and experiences to be replicated and for the creation of a network of actors capable of promoting innovation in the territories.

Italian Smart Cities is the most complete collection point in Italy of urban innovation initiatives launched by municipalities and businesses on energy efficiency issues, sustainable mobility, the digital agenda, social innovation and urban governance. Not just a showcase but a real tool of work that aims to fuel the exchange of knowledge between administrations by providing information and detailed data to support the reuse of projects in other contexts. The platform was conceived to overcome information asymmetries between existing administrations, to make available the administrative acts that enabled the solution to be made, to connect direct and (informal) the subjects that have made them both of the world public and that business, building a peer reviewing system that analytically emerges from the qualifying factors of individual experiences, identified within shared impact assessment systems.

At www.italiansmartcities.it we can now look at the technical data sheets of over 1300 projects. Project information is entered directly by Municipalities and Municipal Unions, who are members of ANCI's Smart City National Observatory, which coordinates operations in a collaborative and transparent manner. For every project you always have the general information available: from budget to project implementation times, from project recipients to the reference sector, from social and economic impact to replication conditions, through partners, advancement of the project, the administrations involved and much more.

For each city, it is also possible to know the set of activated policies and planning, as well as the overall measure of the investments made. Platform usage is simple and intuitive, at the top of the home page there are channels for access to content.
 

Chapter 12: Key trends to watch