Italian government meets with car industry to tackle sales crisis

Reuters

ROME, Oct 24 (Reuters) - Italy's Industry Ministry, carmakerFiat and other industry representatives have created aworking committee which met on Thursday to look at what can bedone to help lift car sales from a 34-year low, the ministrysaid on Thursday.

A toxic mix of factors including a weak economy, tightcredit conditions, the highest road fuel prices in Europe, fewernew models from Fiat and a crackdown on tax evasion, that hashit luxury car sales, has prompted the industry to put morepressure on the government for action.

Europe's overall car sales fell to a 20-year low in thefirst half of 2013, but Italy's market has been worse, and isexpected to contract this year to its lowest level since 1979.

The group did not discuss cash incentives to boost carsales, said Industry Ministry Undersecretary Claudio De Vincentiafter the meeting, but he added that it will meet again inNovember to discuss specific proposals.

According to 2012 data provided by industry trade groups,the car industry accounted for 11.6 percent of Italy's GDP and16.6 percent of tax revenues.

"The government doesn't have a lot of money to spend, so wehave to be pragmatic," automotive industry association Anfia'schairman, Roberto Vavassori, told Reuters after the meeting.

Anfia will propose at the next meetking measures such assupport for corporate and rental fleet sales, reducingregistration taxes, cutting insurance costs and enlargingItaly's alternative fuel distribution network, he said.

The working committee is the first time Italy has broughttogether manufacturers, distributors and other industry groups.

"It's an important step," said Filippo Pavan Bernacchi, headof the car retailers' group Federauto.

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