The Automotive Sector
The Italian automotive sector directly generates a turnover of about 52 billion euros, 106 billion if indirect activities are also considered. The competitiveness of the sector is superior to that of the manufacturing sector as a whole: the Italian automotive supply chain positions itself in the segments with the highest added value thanks to not only the excellence in the production of high-end vehicles and commercial vehicles but also due to the production specializations characterizing the component districts in particular. About 20% of the added value generated by the component sector in Italy is indirectly incorporated into products exported by other commercial partners, signaling a significant ability to penetrate international markets.
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Among European countries, Italy has felt the impact of the crisis most intensely. The complete lockdown starting from March 11th led to a drop in monthly sales of over 85%, reaching almost 98% in April. In two months, the market recorded an 18% drop compared to the total cars sold throughout 2019. It is estimated that the crisis caused by Covid-19 will result in a turnover reduction of between 24.5%, in the Base scenario, and 42% in the Severe scenario for 2020. Employment in the sector was already contracting before March 2020. The estimates on the employment decline due to the current crisis are very severe due to the activity blockage, which, during the lockdown, affected about 70,000 workers. Small and medium-sized enterprises, which largely constitute the sector’s supply chain and commercial network, will be the most affected.
The automotive sector is the leader in Research & Innovation investments
In Europe, the automotive sector employs a total of almost 14 million people, both directly and indirectly, accounting for 6.1% of European employment. The sector represents a factor in promoting innovation in the entire production system. Indeed, it is the leading sector in terms of research and development spending, responsible for 28% of total European R&D expenditure. Moreover, Europe is the leading global investor in R&D in the sector. In 2018, more than 57 billion euros were spent, compared to about 30 billion in Japan, 15 billion in the United States, and 5 billion in China1.
On international markets, the sector is characterized by a marked regional imprint, particularly concerning supply chains that link raw materials, intermediate inputs, and finished products. The United States, Germany, and Japan still represent, as they did thirty years ago, the key countries around which the North American, European, and Asian markets respectively revolve. This trend seems destined to strengthen, with the increasing spread of protectionist measures globally.
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To develop a recovery plan for the entire supply chain, both short-term policy interventions and broader actions are proposed to restart the sector, overcome some structural limits, and relaunch it from a social, environmental, and economic sustainability perspective.
The main lines of intervention to be implemented will concern: