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THE AUTOMOTIVE AND CONSTRUCTION

EQUIPMENT INDUSTRY

ITALY
Fact Pack

Swedish Trade Council in Italy


2006

1
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Italian Construction Equipment Industry

 Recommendations

 References

2
THE ITALIAN MANUFACTURING INDUSTRY
PRODUCES FOR A VALUE OF SEK 7 600 BILLION
 The total turnover of the Italian manufacturing
5 largest manufacturing industries in industry is SEK 7 615 billion
Machinery Italy  the Swedish manufacturing industry’s
construction
turnover is SEK 1 357 billion
Thefood  The most important sectors within the
industry manufacturing industry are construction of
machinery and food related production
Automotive
 There are approximately 540 000 companies
active within the manufacturing industry in
Chemicals Italy
 4.9 million employees
Metal  The Italian industrial structure is
products
dominated by small companies. 83 % of
0 200 400 600 800 the manufacturing companies employs
less than 9 employees.
 The average labour cost for an industry worker
in Italy is SEK 198 per hour
Billion SEK

construction and food production stand for 20% of the total Italian manufactu
3
e: ISTAT, Eurostat
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Passenger Cars

 Commercial Vehicles

 Suppliers

 Italian Construction Equipment Industry

 Recommendations

 References

4
THE ITALIAN PRODUCTION OF CARS AND
COMMERCIAL VEHICLES TOTALS SEK 407
BILLION
- the latest
billion statistics
Production of cars andindicates an upswing in
commercial vehicles
500 industry in Italy
value
SEK of production
Trailers and
400
containers
SEK 14 billion
300

Vehicles
200
Components andand engines
accessories SEK 132 billion
100 SEK 260 billion

0
2001 2002 2003
Domestic Export

Growth mainly due to increasing exports of Italian automotive suppliers


5
rce: ISTAT
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 HEAVY TRUCKS BUSSES PASSENGER CARS


(270 000 vehicles) (40 000 vehicles) (4 000 vehicles) (723 000 vehicles)
 3 manufacturers  1 manufacturer  3 manufacturers  4 manufacturers
 Iveco (part of Fiat Group)  Fiat Group (Fiat, Lancia, Alfa
 Iveco  Irisbus (part of Romeo, Maserati and Ferarri):
(part of Fiat  Trailer manufacturers 700 000
Iveco): 3 200
 Rolfo Volkswagen Group
Group): 183 000  Carozzeria Barbi

(Lamborghini): 1 500
 Merker (Margaritelli)
 Sevel (Joint  Pininfarina (Mitsubishi, Alfa
 Acerbi – Viberti (Volvo): 400 Romeo and Ford): 14 000
Venture between  Officine Cardi
Fiat Auto and
 Breda Menarini  Bertone (Opel): 7 500
 Menci & C.
PSA): 81 000  Pezzaioli Carozzeria
Bus: 400
 Piaggio: 6 000

Source: Automobile Produktion 6


CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Passenger Cars

 Commercial Vehicles

 Suppliers

 Italian Construction Equipment Industry

 Recommendations

 References

7
THE ITALIAN PRODUCTION OF PASSENGER
CARS HAS PERFORMED POORLY BUT IS
SHOWING SIGNS OF RECOVERY
Passenger Car Production in Italy Development the last 5 years

 The Italian quote of the worldwide vehicle production


Vehicl has decreased from 8,2 % in 1999 to 4,7 % in 2004.
1500000 es  In terms of volume this means a decrease of about 40 %.
Compared with 2004 the production in 2005 decreased with
1250000 about 13 %.
 The problems can in part be explained by Investment in
lower-cost production abroad.
1000000
 Another reason for the decrease is the sluggish
development and problems of Fiat Auto which have four
750000 major explanations:
 Product range: Limited and underdeveloped. Insufficient
500000 investments in R&D and product development
 International presence: Significant presence on to few
foreign markets. Inability to take advantage of motorization
250000 in developing countries.
 Sales and After Sales network: Underdeveloped in terms of
service quality and customer satisfaction.
0
 C-segment: Wrong market positioning of the Fiat Stilo has
2001 2002 2003 2004 2005 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.

8
ws, ANFIA, Il Sole 24 Ore
FIAT’S PURCHASE DECISIONS FOR THE ITALIAN
PRODUCTION IS CENTRALISED TO HEADQUARTER IN
TURIN
Manufactu Employe Business Purchase decisions
rer es
Fiat Auto 180.000Passenger HQ, Turin, Italy (For all Italian production.
cars Also has local HQs in Brazil and Turkey with
Passenger Cars

Transporters authority to make purchase decisions)

Pininfarina 2.090Passenger The respective OEM for which Pininfarina


cars produces mainly makes purchase decision
at HQ. They also have representatives at
the plant for day to day decisions.
Bertone 1.796Passenger GM-Opel, HQ Europe, Rüsselsheim,
cars Germany.

Volkswagen 350Passenger HQ of Lamborghini, S. Agata Bolognese


Group cars (Bologna), Italy
(Lamborghini)

9
urce: Kompass, interviews
THERE ARE A TOTAL OF 13 CAR MANUFACTURING
PLANTS IN ITALY
- Fiat
MostGroup
of them are operated by Fiat
Manufactur Plants
Auto
Models and focus Productio
Chivasso er n volume
Pininfarina
Bairo Fiat
Canavese Group Fiat Group  Cassino Fiat: 700 000
(Ferrari) Fiat  Chivasso (Croma, Stilo, Punto,
Pininfarina Lancia  Maranello Idea, Multipla)
Maranello
San Giorgio Alfa Romeo (Ferrari) Lancia:
Fiat Maserati  Melfi (Y, Lybra, Musa, Thesis)
Canavese Ferrari Mirafiori Alfa Romeo:
Group 
 Modena (166, 147, 148, 156,
Pininfarina (Maserati) (Maserati) 159, 169, Brera, C-
Grugliasco Modena
Wolkswagen  Pomigliano Cross Over,GT Coupe)
Fiat  Termini Imerese Ferrari:
Group (355/456GT/550/FXX)
Bertone Group
(Lamborghini) Maserati:
Grugliasco Mirafiori (Quattroporte,Coupè
Sant’ Agata Cambiocorsa; ITCA
Fiat Bolognese Fiat body-in-whites)
Group Group
Cassino
Fiat Melfi
Group
Pomigliano Volkswagen  Sant’ Agata Lamborghini : 1 500
Group Bolognese (Gallardo,
Lamborghini Murcielago)

Pininfarina  Bairo Canavese Mitsubishi: 14 000


No own  Crugliasco (Colt, Pinin Pajero)
Fiat Group brands  San Giorgio Alfa Romeo:
Termini Canavese (8C Competizione,
Imerese Spider)
Ford :
(Focus, StreetKa)
10
mobile Produktion, interviews 
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, Fiat’s 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 Fiat’s production abroad and switching its loyalty with its Italian suppliers towards a higher dependence on suppliers from countries with lower

costs.

Globalization

 Fiat’s new chief executive Sergio Marchionne has ended the company’s 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

11
urce: STC, Interviews
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Passenger Cars

 Commercial Vehicles

 Suppliers

 Italian Construction Equipment Industry

 Recommendations

 References

12
ITALIAN PRODUCTION OF COMMERCIAL
VEHICLES WHICH IS HEAVILY DOMINATED BY
LIGHT TRUCKS
Commercial IS INCREASING
Vehicle Production in Development the last 5 years
Italy

Vehicl
350000 es
 After an exceptional, and statistically distorting,
300000 beginning of the 21st century because of fiscal
stimulations the Italian production of commercial
250000 vehicles has since the slight downturn in 2003
been steadily increasing for more natural reasons
200000  Overall the increase in production from 2003
reached 6 % (CAGR 2 %).
150000  The increase is driven by strong performance of
light trucks whose production boomed in 2004
100000 growing with 4,6 %.
 The increase is in part explained by the strong
50000
performance of Fiat and Iveco depending on
0 successful releases of new models (especially by
penetrating more segments of the LCV market)
2001 2002 2003 2004 2005 and a very aggressive marketing policy.
Light Trucks Heavy Trucks Buses  The increase has also been driven by domestic
demand because of Italian companies need to
renew obsolete car fleets.

13
rce: STC, Interviews, ANFIA, UNRAE
THE ITALIAN PRODUCERS FIAT AND IVECO BOTH
MAKES PURCHASE DECISIONS AT HEADQUARTERS IN
TURIN
Manufacturer Employe Business Purchasing decisions
es
IVECO 31.511Light HQ, Turin, Italy
(Fiat Group) Commercial
Vehicles, Heavy
Trucks, Busses
Commercial
vehicles

Sevel 5.200Light Plant is managed by Fiat , in


(Joint venture Commercial agreement with PSA dedicated
between Fiat Vehicles people. Therefore purchase
Auto and PSA ) decisions are mainly taken at
Fiat Auto HQ in Turin.

Piaggio 3.500Light HQ, Pontedera, Italy


Commercial
Vehicles
Irisbus 1.393Busses HQ, Turin, Italy (Fiat Group)
(Fiat Group) HQ, Lyon, France (Irisbus)

BredaMenarini 310Busses HQ, Bologna, Italy


Bus 14
rce: Anfia,Kompass,interviews
THE ITALIAN COMMERCIAL VEHICLE INDUSTRY
IS DOMINATED BY FIAT AND FIAT CONTROLLED
IVECO Manufacturer Plants Models and Productio
focus n volume

Sevel  Val di Sangro Citroen: 183 000


Iveco (Joint venture (Jumper)
Iveco Suzzara between Fiat Fiat:
Brescia Auto and PSA) (Ducato) Peugeot:
(Boxer)
Carrozzeria
Barbi
San Giacomo IVECO  Suzzara Iveco: 81 000
 Brescia (Daily,Eurocargo,
Piaggio Roncole
Breda Menarini  Bolzano Stralis)
Pontedera Bus Piaggio  Pontedera Piaggio: 6 000
San Donato (Produces own (Porter)
brand and for Daihatsu:
Sevel Daihatsu) (Hijet)
(Fiat Auto and
Irisbus  Valle Ufita Irisbus: 3 200
Irisbus PSA) (Controlled by (Cityclass, Citelis,
Valle Ufita Val di Sangro IVECO and part Midway, Midys,
of Fiat Group) Arway, Evadys)

Carrozzeria  San Giacomo Volvo: 400


Barbi Roncole (Genesis)
(produces for
Volvo)

Breda Menarini  San Donato Breda Menarini Bus: 400


Bus (M231C, M231M,
M240N, M240L,
Avancity, M340,
M240LI, M200E,
15 M231CNG,
mobile Produktion, interviews M240CNG, M240EI)
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.
Increasing The production has been rising thanks to intelligent product releases and the positive trend shows no signs of bringing to a halt.

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
Customized leasing solutions.
services

16
urce: STC, Interviews
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Passenger Cars

 Commercial Vehicles

 Suppliers

 Italian Construction Equipment Industry

 Recommendations

 References

17
THERE ARE ABOUT 1 700 AUTOMOTIVE
SUPPLIERS IN ITALY
- But the medium size of companies
Italian automotive suppliers
is rather of
Geographical concentration
automotive suppliers
small
 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.
Low High

Source: STC, interviews, ANFIA 18


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, Cockpit, seats, dash- Power train, exhaust Body, roof, glass, Suspension, brakes,
embedded systems board, air conditioning systems, engines
doors, lighting etc. axles, steering, tires
 Magneti Marelli  Lear Corporation  Magneti Marelli  Magneti Marelli Sistemi
Sistemi Elettronici  Automotive
 Delphi Italia Powertrain Sospensioni
 Delphi Italia Automotive Systems  Delphi Italia Lighting Rear  Sogefi
Automotive Systems  Valeo Lamps Italia
Automotive Systems  Pirelli Tyre
 Valeo
 Intier  Dayco Europe (Magneti  Carraro
 T.R.W Automotive Italia Fiamm Automotive Marelli)  Brembo
S.p.A Batteries  Lear  Delphi Italia Automotive
 Johnson Controls Italia
Corporation Systems
 T.R.W Automotive Italia
 Valeo
 Bosch -Tecnologie Diesel e
Sistemi Frenanti

Source: Anfia,interviews 19
TIER ONE SUPPLIERS: DETAILED INFORMATION (1/2)

Manufacturer Employe Business Italian headquarter


es
Pirelli Tyre 21.500Tyres Milan
Magneti Marelli 20.000Powertrain, suspension, Turin
Holding S.p.A lighting, electrical systems
Sogefi 6,171Engine and cabin filtration. Mantova
T1 Suppliers

Suspensions components.
Lear Corporation 3.000Seat systems, electronic Grugliasco
products and air-conditioning,

T.R.W Automotive 2.260Brakes, suspension Moncalieri (Turin)


Italia

Brembo 2.000Brakes Curno


Bosch- Tecnologie 1.942Diesel engine injection pumps. Modungo (Bari)
Diesel e Sistemi Brakes components.
Frenanti Italia

20
urce: Kompass, interviews
TIER ONE SUPPLIERS: DETAILED INFORMATION (2/2)

Manufacturer Employe Business Italian headquarter


es
T1 Suppliers

Dayco Europe 1.164Power transmission, air-intake Airasca (Turin)


and engine cooling
Valeo 1.130Lighting, electrical systems, Santena (Turin)
motors, engine cooling etc
Delphi Italia 885Chassi, steering systems, Collegno (Turin)
Automotive powertrain, safety systems
Systems
Johnson Controls 200Electronic components for air Milan
Italia conditioners.

21
urce: Kompass, interviews
FOR STRATEGIC REASONS THE T1 SUPPLIERS
ARE MOSTLY FOUND NEAR THE HQs AND
PLANTS OF THE OEMs Tolmezzo
Curno Automotive Lighting Rear
Brembo Lamps Italia (Magneti Marelli)

Milan Montecchio Maggiore


Magneti Marelli Sistemi Elettronici Fiamm Automotive
Pirelli Tyre Batteries
Johnson Controls Italia Bologna
Magneti Marelli
Powertrain
Mantova
Turin Sogefi
Delphi Italia Automotive
Systems
Valeo
Lear Corporation Italia
T.R.W Automotive Italia Bari
Dayco Europe Bosch - Tecnologie
Magneti Marelli Sistemi Diesel e Sistemi
Sospensioni Frenanti

22
Source: STC
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, Cockpit, seats, Power train, Body, roof, glass, Suspension,
embedded systems doors, lighting etc.
dash-board, air exhaust systems, brakes, axles,
 ITT Industries
conditioning engines  Automotive steering, tires
Friction Products Lightning Italia
 ASK Industries
 Gammastamp  Fonderie  Gruppo Sogefi
Rear Lamps
 Conceria Mario (Magneti Marelli)  Metelli
Pasubio Mazzucconi  Olsa  Federal Mogul
 SKF Industrie
 Federal Mogul Operations
 Metelli Operations Italy Italy
 Ufi Filters  Sila Holding
Industriale

23
Source: Anfia, Automobil Cluster
TIER TWO SUPPLIERS: DETAILED INFORMATION (1/2)

Manufactur Employe Business Italian headquarter


er es
Sogefi 6.171Filters, suspension and Mantova
precision springs
ITT Industries 1.000Electronic components Barge
T2 Suppliers

Friction
Products

SKF Industrie 944Bearings Villarperosa (Turin)

Automotive 800Lighting Tolmezzo


Lighting Italia
Rear Lamps

Gammastamp 730Components for safety Bianzé


belts, doors etc
Metelli 420Brake parts, engine Cologno Monzese (Monza)
parts, transmission

24
e: Anfia, Automobil Cluster, Kompass
TIER TWO SUPPLIERS: DETAILED INFORMATION (2/2)

Manufactur Employe Business Italian headquarter


er es
Fonderie Mario 388Components for Bergamo
Mazzucconi engines, transmission
and brakes etc
T2 Suppliers

ASK Industries 300Car audio e antenna Reggio Emilia


systems, amplifiers,
cables etc
Conceria 250Leather for carseats Arzignano, Padua
Pasubio
Ufi Filters 230Filters Nogarole Rocca (Verona)
Federal Mogul 135Components for lighting, Turin
Operations friction and power
Italy cylinder systems

Olsa 51Interior and exterior Turin


lighting components

25
Source: Anfia, Automobil Cluster
ITALIAN SUPPLIERS HAVE DIVERSIFIED THEIR
CUSTOMER BASE, AND SPECIALISED THEIR PRODUCT
PORTFOLIOS Trends within the Italian automotive
supplier industry
 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 customer portfolio with non-Italian customers.
diversification  Italian suppliers are now performing very well because of increasing exports and
less dependence on Fiat Group.

 Italian automotive suppliers are slowly becoming more specialized (i.e.


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

 Delocalization of Italian automotive suppliers:


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

26
urce: STC, interviews
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Italian Construction Equipment Industry

 Manufacturers

 Suppliers

 Recommendations

 References

27
THE ITALIAN PRODUCTION OF CONSTRUCTION
EQUIPMENT TOTALS ABOUT SEK 43 BILLION
- the industry grew with more than 8% in 2005
billion Production machine and construction
SEK vehicles in Italy Road Equipment SEK 3
40 billion
Concrete Equipment

30 SEK 6 billion

20 Tower Cranes SEK 3


billion

10 Earthmoving Crushing, Washing,


Equipment Sizing Equipment SEK
2 billion
0 SEK 29 billion
2002 2003 2004 2005
Domestic Export

Growth mainly a result of increases in exported volumes


28
mmittee for European Construction Equipment
TOTALLY THERE ARE ABOUT 300 COMPANIES
ACTIVE WITHIN THE CONSTRUCTION EQUIPMENT
INDUSTRY IN ITALY
- But many companies are small and only active
locally (examplesCONSTRUCTION EQUIPMENT
of the largest companies in the industry)

EARTH MOVING MINING LIFTING ROAD

Excavators, wheel loaders, Wheel loaders, Mobile cranes, Graders, asphalt


backhoe loaders, Skid steer drills, haulers forklifts pavers, asphalt
loaders, haulers
 Komatsu Italia SpA  Solimec  Marchetti mixers
Bitelli (Catepillar
 CNH (Fiat Group)
 Astra Veicoli Industriali
 Casagrande Autogru Italia)
(Owned by IVECO and  Raimondi  Antec
part of Fiat Group)
 Merlo
 Merlo  Marini
 SCAI SpA (Hitachi)  Terexlift  CNH (Fiat Group)
 Fiori SpA
 Macmoter SpA
 Amoc Veba Srl  Fiori SpA
 Euromach Srl

29
Source: UCoMESA , Anima
CONSTRUCTION EQIPMENT OEMs: DETAILED
INFORMATION (1/2)
Manufactur Business Turnover Employe Plant Purchasing
er es decisions
(EUR m)

CNH (Fiat Escavators, skid steer € 9 796 m 2.704 Modena HQ, Modena, Italy
Group) loaders, backhoe loaders

Astra Veicoli Dump-trucks, tractors € 211 m 480 Piacenza HQ, Piacenza, Italy
Industriali
Merlo Telescopic handlers € 195 m 500 Cervasca HQ, Cervasca, Italy
Marini Asphalt pavers, paver € 85 m 370 Alfonsine HQ, Alfonsine, Italy
finishers, cold milling
planers etc
Bitelli Asphalt pavers and cold € 75 m 265 Minerbio HQ, Minerbio, Italy
(Caterpillar planers
Italia)
Terexlift Lifting platforms € 50 m 130 Umbertide HQ, Umbertide, Italy

Casagrande Hydraulic Crawler Drills, € 39 m 250 Fontanafred HQ, Fontanafredda,


piling equipment, da Italy
crawler cranes
rce: Kompass, UCoMESA, Anima, 30
CONSTRUCTION EQIPMENT OEMs: DETAILED
INFORMATION (2/2)
Manufactur Business Turnover Employe Plant Purchasing
er es decisions
(EUR m)

Marchetti Cranes € 12 m 70 Piacenza HQ, Piacenza, Italy


Autogru
Fiori Excavators, loaders, € 16.2 m 49 Finale Emilia HQ, Finale Emilia
mixers, dumpers, (Modena) (Modena), Italy.
backhoe loaders
Euromach Excavators € 3.5 m 24 Montichiari HQ, Brescia, Italy
(Brescia)
Macmoter Excavators, skid track €3m 53 Modigliana HQ, Modigliana
loaders, dozers, prime (Forlì (Forlì), Italy
movers Cesena)
Komatsu Wheel loaders, n/a n/a Vicenza HQ, Vicenza, Italy
escavators, skid steer
loaders
Antec Steer skid loaders, cold n/a n/a Peschiera HQ, Peschiera
planers Borromeo Borromeo, (Milan),
Italy
31
Soilmec
rce: Kompass, Rotary
UCoMESA, Anima, rigs, drilling n/a n/a Cesena HQ, Cesena, Italy
THE ITALIAN CONSTRUCTION EQUIPMENT
INDUSTRY IS CONCENTRATED TO THE REGION
EMILIA ROMAGNABrescia
Vicenza Fontanafredda
Komatsu Casagrande
Milan Euromach
Antec
Raimondi

Alfonsine
Marini
Cervasca Minerbio
Merlo Bitelli
Piacenza Cesena
Marchetti Autogru Soilmec
Astra Veicoli Industriali Modigliana
Poviglio Macmoter
Amoc Veba Umbertide
Mode Terexlift
na
CNH
Fiori

32
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Italian Construction Equipment Industry

 Manufacturers

 Suppliers

 Recommendations

 References

33
MOST OF THE ITALIAN SUPPLIERS TO THE
CONSTRUCTION EQUIPMENT OEMs ARE SMALL
AND MEDIUM SIZED COMPANIES
SUPPLIERS
(examples of the largest ones)

Propulsion
Electrical systems and running Steel construction Hydraulics Accessories
gear
Cables, sensors, semi Power train, engines, Undercarriage and body All kind of hydraulic cylinders All kind of accessories
conductors, control units
exhaust systems, axles

 Siemens Vdo  SKF Italia  Italscania SpA  Bosch Rexroth  Berco SpA
Trading  Cararro SpA  Perlini  C.A.M.I  Cobo
Robert Bosch International
 Bosch Rexroth  Hydrocontrol  Case del Sedile
 SAIM Europe Srl Homberger  Isringhausen
 Safim SpA  Webasto product
Italy

34
Source:STC, interviews
CONSTRUCTION EQUIPMENT SUPPLIERS:
DETAILED INFORMATION (1/2)

Manufacturer Employe Business Purchasing decisions


es
Construction equipment

SKF Italia 3649 Propulsion and running gear HQ, Turin, Italy

Berco 3000 Accessories HQ, Ferrara, Italy


suppliers

Carraro 913 Propulsion and running gear HQ, Padua, Italy

Robert Bosch 476 Electrical systems HQ, Milan, Italy

Isringhausen 400 Accessories HQ, Novara, Italy

C.O.B.O. 300 Accessories HQ, Brescia, Italy

Perlini International 300 Steel construction HQ, Verona, Italy

Hydrocontrol 175 Hydraulics HQ, Bologna, Italy

35
rce: STC, Kompass, interviews
CONSTRUCTION EQUIPMENT SUPPLIERS:
DETAILED INFORMATION (2/2)

Manufacturer Employe Business Purchasing decisions


es
Construction equipment

Italscania 79 Steel construction HQ, Trento, Italy


Homberger 52 Hydraulics HQ, Genoa, Italy
SAFIM 52 Hydraulics HQ, Modena, Italy
suppliers

CAMI 35 Hydraulics HQ, Padua, Italy


Siemens VDO Trading30 Electrical systems HQ, Milan, Italy

Webasto product 25 Acessories HQ, Milan, Italy


Italy
Case del Sedile 18 Acessories HQ, Modena, Italy
SAIM Europe n/a Propulsion and running gear HQ, Milan, Italy

Bosch Rexroth n/a Propulsion, running gear HQ, Milan, Italy


and Hydraulics

36
rce: STC, Kompass, interviews
THE SUPPLIERS TO THE CONSTRUCTION
EQUIPMENT OEMs ARE CONCENTRATED
AROUND MILAN IN THE Brescia
Varese
REGION OFTrento
LOMBARDY
Isringhausen Cobo Italscania
Milan Padova
Siemens Vdo Trading C.A.M.I.
Robert Bosch Carraro
Webasto Product Italy
Bosch Rexroth Verona
Saim Perlini International
Ferrara
Turin Berco
SKF Itallia
Modena
Genua Casa del sedile
Homberger Safim
Bologna
Hydrocontrol

37
urce: STC, interviews
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
 In 2005 the ItalianEquipment industry
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
Increasing competition offering and increasing the quality of the after sales service.
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

38
urce: STC, interviews
CONTENT

 Overview Italian Manufacturing Industry

 Italian Automotive Industry

 Italian Construction Equipment Industry

 Recommendations

 References

39
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

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.

Fragmented value
chains

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

 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.

Late payments

40
urce: STC, interviews
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
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.

Delivery

 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.
Price

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

customer

41
urce: STC, interviews
CONTENT

 Overview Italian industry

 Italian Automotive industry

 Recommendations

 References

42
STC IN ITALY CAN SUPPORT SWEDISH
COMPANIES IN ALL ACTIVITIES FROM MARKET
ANALYSIS TO BUSINESS START-UP



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.

Market
analysis

 Identification and evaluation of potential distributors, agents and suppliers.


 Initiate and conduct discussions with potential partners.
 Arrangement and realization of business meetings.

Partner search

 Local sale- and Key Account support.


 Back-office support: Economic administration, customer service, administration of personnel.
Business
support office

Formation of Italian subsidiary.



Recruitment / head hunting

Property search

Assistance in merger & acquisition

Business start-
up

43
Source: STC
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
COMPANY PROFILE

Manufacturer of vehicle
racking systems for service
vans.

Producer of aftermarket
body panels.

Manufacturer of car covers


that protects the varnish.

Developer of electronic
systems and software for
automobiles, trucks and
buses.

44
Source: STC