Italy's luxury police hunt Ferrari owners
The government of Prime Minister Mario Monti is implementing 20-B Euros (US$25-B) in austerity measures as the country struggles with 1.9-T Euros of debt.
The economy has contracted for 4 straight Quarters and unemployment has risen to a 13-yr high as consumer spending and industrial output fall.
The downturn prompted Fiat, Italy's biggest manufacturer, to temporarily halt investments in the country.
Chief Executive Officer Sergio Marchionne may close another factory after shuttering a plant in Sicily last year. Weaker SuperCar demand could turn Fiat away from Italy and accelerate the shift to stronger markets like the US and China.
Mr. Marchionne relies on Fiat's luxury models to offset losses at the group's mass-market brands in Europe, which totaled 345-M Euros in 1-H.
Ferrari and Maserati's combined operating profit was 175-M Euros in the period, equivalent to 12.2% of sales.
Italy has become a declining source of SuperCar profits after Mr. Monti raised ownership levies on high-performance vehicles as part of his budget reforms.
After the changes, owners of the 316,000-Euro Lamborghini Aventador pay about 8,400 Euros a year in taxes, an increase of 6,600 Euros.
On top of the extra levies, SuperCar-owners are being scrutinized in efforts to flush out tax evaders. Since December 2011, Italian authorities have conducted dozens of raids in wealthy areas, including the ski resort Cortina d'Ampezzo and Portofino on the Riviera.
The officials stop SuperCar's to check whether their owners declared sufficient income, and paid enough taxes to support their lifestyles.
Near Venice last month, financial police arrested a 44 anni man driving a Ferrari F40 for not paying 8-M Euros in taxes since Y 2006. In a July sweep in the northern town of Bergamo, police found that the driver of a 200,000 Euro Ferrari F131 had evaded 3-M Euros in taxes since Y 2007.
"Many Ferrari owners want to get rid of their SuperCar's after the financial police came to one of our events near Rome and checked every driver," said Fabio Barone, who heads the Ferrari owners' club Passione Rossa. One of the members put a Ferrari 458 up for sale for 143,000 Euros after buying it for 224,000 Euros last year, he said.
"The high-end car market is one of the more resilient to the crisis, and Italy is punishing it, not a wise decision,"said Romano Valente, general manager of Unrae, which represents foreign automakers in Italy. "The luxury tax has created a perverse mechanism."
While Ferrari's sales in Italy were hurt by an "anti-rich" political campaign, demand in other markets for cars like the 4-seat FF will help the automaker increase sales to more than 7,000 vehicles this year, Chairman Luca Cordero di Montezemolo said at the Geneva Motor Show in March.
Though Mr. Montezemolo supports the government's fight against tax evasion, he disagrees with the "demagogic spectacularisation" of those efforts, said a Ferrari official. The carmaker sells about 95% of its cars outside Italy.
Still, the global expansion by Ferrari, Maserati and Lamborghini will not help Italians like those in the Passione Rossa club. In June, more than 40 members were checked by police who were waiting when a ferry carrying them docked at the port of Palermo for a driving event in Sicily.
"The situation is dramatic," said the Club's President, "The Dolce Vita era "is far behind us."
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.