Italian fleet management has never been more challenging. For both operators and the associated supply chain, the evolving infrastructure is dominated by legal, political, financial and environmental turbulence, which must be closely monitored and managed.  Here, we look at the Italian market overview and the challenges facing fleet management, from the complexities of tax and emission regulations to EV adoption and the impact of WLTP.

Cut emissions or pay the price

The Italian government has introduced a double strategy subvention programme that rewards eco drivers with bonuses of up to €6,000 for zero-to-low-emission cars until December 31, 2021. Consumers and companies alike can apply for this incentive towards the purchase or leasing of a green car, with a CO2 emission rating of up to 70 g/km. 

At the other end of the scale, anyone buying a new car in Italy will have to pay a penalty for choosing a fuel guzzling, air polluting model, that exceeds the threshold of 160 CO2 g/km.

These eco-tax and eco-bonus schemes are intended to address Italy’s air pollution problem by pushing car buyers and fleet managers towards lower-emitting models. Some regions go as far as offering additional financial incentives for the purchase of EV vehicles by offering substantial rebates for consumers.

The eco-tax scheme applies to brand-new, larger models purchased and registered between March 1st 2019 and December 31st 2021 and is calculated according to how much carbon dioxide a car emits.

The eco-bonus is scaled depending on what type of vehicle you’re buying, how much CO2 it produces and whether you’re trading in an older model. Only cars costing less than €50,000 (ex VAT) and producing less than 70 grams of carbon dioxide per kilometre are eligible and the bonus will be applied directly upon payment of a new vehicle in the form of a pre-tax discount. 

The impact of WLTP

The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) has had a huge impact on the Italian automotive market and especially on fleet managers tasked with making business critical decisions on make and model, running costs plus negotiating lease contract deals. 

Since the introduction of the WLTP, “chilometro zero” cars have become one of the hottest topics in the Italian automotive marketplace. Companies registered as many of these price desirable vehicles as they could and sold them as “chilometro zero” before last September when the WLTP rules came into force and put a stop to this aggressive pricing strategy.

As zero kilometre cars have already been registered by the manufacturer or dealer, this means a change of ownership is required when purchased but the car will not be considered as a used car. These cars are in such high demand because dealerships are aggressively trying to sell them as quickly as possible to meet their sales targets, normally resulting in attractive pricing offers. However, as most Italian businesses lease rather than buy their vehicles, fleet managers could not take advantage of “chilometro zero” cars which would help them substantially reduce their fleet running costs.

Moreover, WLTP tests took much longer than expected for some makes and models (especially for premium brands such as Volkswagen Group, BMW and Mercedes which are common in Italian fleets).  This resulted in a delays in quotations and negotiations forcing fleet manages to renew old contracts or negotiate extensions as they could not order new and potentially more cost efficient vehicles.

Go green

Many Italian fleet policies have been affected by the uncertainty of the future of diesel cars and consumption. This has greatly impacted on fleet management’s ability to effectively manage contract lengths, green guidelines and budgets in the short term.

Managers who oversee high mileage fleets still have a propensity to favour diesel vehicles, but there remains much uncertainty over the future viability and residual value of diesel fleets. Several Italian cities have already committed to a progressive ban on diesel cars and are paving the way for low emission alternatives. By increasing restrictions on and prohibiting older high-polluting vehicles from entering a city, the days of diesel-fuelled fleets are surely limited?

Meanwhile, fleet managers are being pushed towards EV dominated fleet contracts, medium-term commitments and extensions or renewal of old contracts until new laws and regulations relating to CO2 pollution and EV adoption are firmly in place.

Government support for EV adoption

Although EV adoption in Italy has been much slower than other European countries, growth over the last two years signifies a commitment among Italian fleet managers towards sustainable mobility.

The Italian government provides some incentives for the use of EVs including exemption from the annual circulation tax (ownership tax) for a period of five years from the date the EV was first licensed.

It is expected that the new government will invest heavily in long term green initiatives starting with more publicly accessible charging points which will have a huge impact on fleet mobility. Last year, the Italian government pledged to put one million electric vehicles on the nation’s roads by 2022 in an effort to go from being one of the weakest EV market to replacing Norway as the strongest.

EVs are a perfect solution for city transport (and low mileage fleets less than 20k km/year). They open up new opportunities in the concept of cars as a service – from car sharing to taxis and green fleets for companies looking to leverage their eco credentials.

Moving towards mobility management

Mobility has become the latest burgeoning trend in fleet management as more providers diversify their product portfolio to offer alternative ways for customers to move resources more efficiently and more cost effectively.

Software advancement in mobility solutions is facilitating the move away from the outdated TCO model and swiftly changing the definition of mobility and the role of the fleet manger within large companies. By meeting the evolving travel needs of employees with legislative and social obligations, dynamic mobility solutions are helping to reduce the carbon footprint and the running costs of many fleets.

More and more Italian companies are looking to independent fleet management operators to implement sharing, pooling, and fleet electrification and diversified modes of travel into their mobility strategy.

Three biggest challenges facing fleet operators

Undoubtedly one of the biggest challenges facing fleet managers in Italy is the need to make their transport activities as environmentally responsible as possible – harmonising cost efficiency within the confines of environmental regulations. By embracing a wider fuel diversity which largely incorporates electrification, managers must find the balance between new engine solutions with pollution reduction and cost per kilometre efficiencies.

As a fleet manager, resource-efficiency is key. Unfortunately, another key challenge for fleet management is finding themselves immersed in tasks that are both time-consuming and add little to the bottom line of the company. Likewise driver’s time – one of the greatest costs and assets needs to be managed to reduce idle time. 

Lastly, fleet managers should look to lead the change, not suffer it. They should take a proactive stance on finding new, greener initiatives to make resources work harder and smarter including reducing vehicle downtime, journey optimisation and eliminating fuel waste. 

Technology making inroads in road safety

Fleet managers have a responsibility for driver safety – and continuous training and the technology incorporated into new generation cars is pivotal in delivering this duty of care.

Mobile apps which incorporate ADAS (Advanced Driver Assistance Systems) technologies are one of the fastest and most important developments for fleet management in Italy. Thanks to the convergence of ADAS and sophisticated telematics, fleet managers can improve safety conditions and enhance the overall experience – particularly for high mileage drivers. 

From blind spot detection and collision avoidance systems to intelligent speed adaptation, lane centring and driver drowsiness detection.  ADAS is no longer the preserve of the premium brands and has empowered fleet managers to make smarter, safer decisions.

Fleets of the future

Despite new car registrations decreasing by about three percent year on year, fleet registration in Italy is bucking this trend.  According to the National Car Rental Industry and Automotive Services Association (ANIASA), one vehicle in six is now part of a fleet – with 80% being in a long term rental contract.  This places fleet managers in a more pivotal and strategic role than ever before.

However, their role is made all the more challenging by the Italian love affair with beautiful sports cars and powerful prestige vehicles. This juxtaposes the zeitgeist of our time which embraces new green fleets.

 Looking ahead, fleet managers must embrace, and make business-enhancing decisions within the confines of new environmental rules, new green technologies, new greener engines and new eco-mobility.

The challenge for 2020 and beyond is finding the compromise between the kudos of owning a desirable car with the desire to do the right thing for the long term good of the planet.

But never underestimate the big impact of small changes.