Go Global Fordonsindustrin Italy

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THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY

ITALY

Fact Pack

Swedish Trade Council in Italy

2006

2

Overview Italian Manufacturing Industry

Italian Automotive Industry

Italian Construction Equipment Industry

Recommendations

References

CONTENT

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THE ITALIAN MANUFACTURING INDUSTRY PRODUCES FOR A VALUE OF SEK 7 600 BILLION

The total turnover of the Italian manufacturing industry is SEK 7 615 billion

the Swedish manufacturing industry’s turnover is SEK 1 357 billion

The most important sectors within the manufacturing industry are construction of machinery and food related production

There are approximately 540 000 companies active within the manufacturing industry in Italy

4.9 million employees The Italian industrial structure is dominated by

small companies. 83 % of the manufacturing companies employs less than 9 employees.

The average labour cost for an industry worker in Italy is SEK 198 per hour

0 200 400 600 800

Metalproducts

Chemicals

Automotive

The foodindustry

Machineryconstruction

5 largest manufacturing industries in Italy

Billion SEK

Machinery construction and food production stand for 20% of the total Italian manufacturing industry

Source: ISTAT, Eurostat

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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THE ITALIAN PRODUCTION OF CARS AND COMMERCIAL VEHICLES TOTALS SEK 407 BILLION- the latest statistics indicates an upswing in value of production

0

100

200

300

400

500

2001 2002 2003

Domestic Export

Vehicles and engines

SEK 132 billion

Trailers and containersSEK 14 billion

Components and accessories

SEK 260 billion

billion SEK Production of cars and commercial vehicles industry in Italy

Growth mainly due to increasing exports of Italian automotive suppliers

Source: ISTAT

6

MORE THAN 1 MILLION VEHICLES ARE PRODUCED IN ITALY- Italy stands for about 5 % of the worldwide vehicle production

VEHICLE MANUFACTURERSVEHICLE MANUFACTURERS

3 manufacturers Iveco

(part of Fiat Group): 183 000

Sevel (Joint Venture between Fiat Auto and PSA): 81 000

Piaggio: 6 000

LIGHT TRUCKS(270 000 vehicles)LIGHT TRUCKS

(270 000 vehicles) 3 manufacturers

Irisbus (part of Iveco): 3 200

Carozzeria Barbi

(Volvo): 400 Breda Menarini Bus: 400

BUSSES(4 000 vehicles)

BUSSES(4 000 vehicles)

HEAVY TRUCKS(40 000 vehicles)HEAVY TRUCKS(40 000 vehicles)

1 manufacturer Iveco (part of Fiat

Group) Trailer manufacturers

Rolfo Merker (Margaritelli) Acerbi – Viberti Officine Cardi Menci & C. Pezzaioli Carozzeria

COMMERCIAL VEHICLES (314 000 vehicles)COMMERCIAL VEHICLES (314 000 vehicles)

PASSENGER CARS(723 000 vehicles)

PASSENGER CARS(723 000 vehicles)

4 manufacturers Fiat Group (Fiat, Lancia,

Alfa Romeo, Maserati and Ferarri): 700 000

Volkswagen Group (Lamborghini): 1 500

Pininfarina (Mitsubishi, Alfa Romeo and Ford): 14 000

Bertone (Opel): 7 500

Source: Automobile Produktion

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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THE ITALIAN PRODUCTION OF PASSENGER CARS HAS PERFORMED POORLY BUT IS SHOWING SIGNS OF RECOVERY

The Italian quote of the worldwide vehicle production has decreased from 8,2 % in 1999 to 4,7 % in 2004.

In terms of volume this means a decrease of about 40 %. Compared with 2004 the production in 2005 decreased with about 13 %.

The problems can in part be explained by Investment in lower-cost production abroad.

Another reason for the decrease is the sluggish development and problems of Fiat Auto which have four major explanations:

Product range: Limited and underdeveloped. Insufficient investments in R&D and product development

International presence: Significant presence on to few foreign markets. Inability to take advantage of motorization in developing countries.

Sales and After Sales network: Underdeveloped in terms of service quality and customer satisfaction.

C-segment: Wrong market positioning of the Fiat Stilo has 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.

0

250 000

500 000

750 000

1 000 000

1 250 000

1 500 000

2001 2002 2003 2004 2005

Passenger Car Production in Italy Development the last 5 years

Vehicles

Source: STC, interviews, ANFIA, Il Sole 24 Ore

9Source: Kompass, interviews

Manufacturer Employees

Business Purchase decisions

Fiat Auto 180.000 Passenger carsTransporters

HQ, Turin, Italy (For all Italian production. Also has local HQs in Brazil and Turkey with authority to make purchase decisions)

Pininfarina 2.090 Passenger cars The respective OEM for which Pininfarina produces mainly makes purchase decision at HQ. They also have representatives at the plant for day to day decisions.

Bertone 1.796 Passenger cars GM-Opel, HQ Europe, Rüsselsheim, Germany.

Volkswagen Group (Lamborghini)

350 Passenger cars HQ of Lamborghini, S. Agata Bolognese (Bologna), Italy

FIAT’S PURCHASE DECISIONS FOR THE ITALIAN PRODUCTION IS CENTRALISED TO HEADQUARTER IN TURIN

Pass

enge

r Car

s

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THERE ARE A TOTAL OF 13 CAR MANUFACTURING PLANTS IN ITALY- Most of them are operated by Fiat Auto

Source: Automobile Produktion, interviews

Manufacturer Plants Models and focus Production volume

Fiat GroupFiatLanciaAlfa RomeoMaseratiFerrari

Cassino Chivasso Maranello (Ferrari) Melfi Mirafiori Modena (Maserati) Pomigliano Termini Imerese

Fiat: (Croma, Stilo, Punto, Idea,

Multipla)Lancia:

(Y, Lybra, Musa, Thesis) Alfa Romeo:

(166, 147, 148, 156, 159, 169, Brera, C-Cross

Over,GT Coupe) Ferrari:

(355/456GT/550/FXX) Maserati:

(Quattroporte,Coupè Cambiocorsa; ITCA body-in-

whites)

700 000

Volkswagen GroupLamborghini

Sant’ Agata Bolognese

Lamborghini :(Gallardo,

Murcielago)

1 500

PininfarinaNo own brands

Bairo Canavese Crugliasco San Giorgio

Canavese

Mitsubishi: (Colt, Pinin Pajero)

Alfa Romeo: (8C Competizione, Spider)

Ford :(Focus, StreetKa)

14 000

BertoneNo own brands

Crugliasco Opel :(Astra)

7 500

Fiat GroupCassino

PininfarinaBairo Canavese

PininfarinaSan Giorgio Canavese

Fiat GroupChivasso

PininfarinaGrugliasco

BertoneGrugliasco

Fiat Group(Maserati)Modena

Fiat GroupMelfi

Fiat GroupMirafiori

Fiat Group(Ferrari)Maranello

Fiat GroupPomigliano

Wolkswagen Group (Lamborghini)Sant’ Agata Bolognese

Fiat GroupTermini Imerese

11Source: STC, Interviews

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.

Fragmentation of market

Fragmentation of market

GlobalizationGlobalization

Fiat is picking up speed

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.

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.

FIAT IS SHOWING SIGNS OF AN IMPRESSING TURN AROUND AFTER YEARS OF POOR PERFORMANCE

Trends within the Italian passenger car industry

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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ITALIAN PRODUCTION OF COMMERCIAL VEHICLES WHICH IS HEAVILY DOMINATED BY LIGHT TRUCKS IS INCREASING

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

2001 2002 2003 2004 2005

Light Trucks Heavy Trucks Buses

Commercial Vehicle Production in Italy Development the last 5 years

Vehicles After an exceptional, and statistically distorting,

beginning of the 21st century because of fiscal stimulations the Italian production of commercial vehicles has since the slight downturn in 2003 been steadily increasing for more natural reasons

Overall the increase in production from 2003 reached 6 % (CAGR 2 %).

The increase is driven by strong performance of light trucks whose production boomed in 2004 growing with 4,6 %.

The increase is in part explained by the strong performance of Fiat and Iveco depending on successful releases of new models (especially by penetrating more segments of the LCV market) and a very aggressive marketing policy.

The increase has also been driven by domestic demand because of Italian companies need to renew obsolete car fleets.

Source: STC, Interviews, ANFIA, UNRAE

14Source: Anfia,Kompass,interviews

Manufacturer Employees Business Purchasing decisions

IVECO

(Fiat Group)31.511 Light Commercial

Vehicles, Heavy Trucks, Busses

HQ, Turin, Italy

Sevel

(Joint venture between Fiat Auto and PSA )

5.200 Light Commercial Vehicles

Plant is managed by Fiat , in agreement with PSA dedicated people. Therefore purchase decisions are mainly taken at Fiat Auto HQ in Turin.

Piaggio 3.500 Light Commercial Vehicles

HQ, Pontedera, Italy

Irisbus

(Fiat Group)1.393 Busses HQ, Turin, Italy (Fiat Group)

HQ, Lyon, France (Irisbus)

BredaMenarini Bus 310 Busses HQ, Bologna, Italy

Carrozzeria Barbi(produces trucks for Volvo)

82 Busses HQ, Mirandola, Italy HQ of Volvo, Torslanda, Sweden

THE ITALIAN PRODUCERS FIAT AND IVECO BOTH MAKES PURCHASE DECISIONS AT HEADQUARTERS IN TURIN

Com

mer

cial

veh

icle

s

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THE ITALIAN COMMERCIAL VEHICLE INDUSTRY IS DOMINATED BY FIAT AND FIAT CONTROLLED IVECO

Source: Automobile Produktion, interviews

Manufacturer Plants Models and focus Production volume

Sevel(Joint venture between Fiat Auto and PSA)

Val di Sangro Citroen: (Jumper)

Fiat: (Ducato) Peugeot:

(Boxer)

183 000

IVECO Suzzara Brescia Bolzano

Iveco: (Daily,Eurocargo, Stralis)

81 000

Piaggio(Produces own brand and for Daihatsu)

Pontedera Piaggio:(Porter)

Daihatsu: (Hijet)

6 000

Irisbus(Controlled by IVECO and part of Fiat Group)

Valle Ufita Irisbus:(Cityclass, Citelis,

Midway, Midys, Arway, Evadys)

3 200

Carrozzeria Barbi(produces for Volvo)

San Giacomo Roncole

Volvo: (Genesis)

400

Breda Menarini Bus

San Donato Breda Menarini Bus:(M231C, M231M,

M240N, M240L, Avancity, M340, M240LI,

M200E, M231CNG, M240CNG, M240EI)

400

IrisbusValle Ufita

IvecoSuzzara

Carrozzeria BarbiSan Giacomo Roncole

Breda Menarini BusSan Donato

Sevel(Fiat Auto and PSA)Val di Sangro

IvecoBrescia

PiaggioPontedera

16Source: STC, Interviews

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.

The production has been rising thanks to intelligent product releases and the positive trend shows no signs of bringing to a halt.

Customized services

Customized services

Consolidation of market

Consolidation of market

Increasing production

volumes

Increasing 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).

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 leasing solutions.

THE POSITIVE TREND WITH A RISING PRODUCTION OF COMMERCIAL VEHICLES SHOWS NO SIGNS OF STAGNATING

Trends within the Italian commercial vehicle industry

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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THERE ARE ABOUT 1 700 AUTOMOTIVE SUPPLIERS IN ITALY- But the medium size of companies is rather 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

Geographical concentration of automotive suppliersItalian automotive suppliers

Source: STC, interviews, ANFIA

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EVEN DUE TO A CONSOLIDATION OF MARKET THE NUMBER OF ITALIAN AUTOMOTIVE SUPPLIERS IS STILL HIGH

Source: Anfia,interviews

Cables, bus systems, embedded systems

Magneti Marelli Sistemi Elettronici

Delphi Italia Automotive Systems

Valeo

Power train, exhaust systems, engines

Magneti Marelli Powertrain


Dayco Europe Fiamm Automotive

Batteries

Cockpit, seats, dash-board, air conditioning

Lear Corporation Delphi Italia

Automotive Systems Valeo Intier T.R.W Automotive

Italia S.p.A Johnson Controls Italia

T1 SUPPLIERS(examples of the largest ones)

T1 SUPPLIERS(examples of the largest ones)

Electrical systemsElectrical systems Interior equipmentInterior equipment PropulsionPropulsion BodyBody Running gearRunning gear

Body, roof, glass, doors, lighting etc.

Automotive Lighting Rear Lamps Italia (Magneti Marelli)

Lear Corporation Valeo

Suspension, brakes, axles, steering, tires

Magneti Marelli Sistemi Sospensioni

Sogefi Pirelli Tyre Carraro Brembo Delphi Italia Automotive Systems T.R.W Automotive Italia Bosch -Tecnologie Diesel e

Sistemi Frenanti


Manufacturer Employees Business Italian headquarter

Pirelli Tyre 21.500 Tyres Milan

Magneti Marelli Holding S.p.A

20.000 Powertrain, suspension,lighting, electrical systems

Turin

Sogefi 6,171 Engine and cabin filtration. Suspensions components.

Mantova

Lear Corporation 3.000 Seat systems, electronic products and air-conditioning,

Grugliasco

T.R.W Automotive Italia

2.260 Brakes, suspension Moncalieri (Turin)

Brembo 2.000 Brakes Curno

Bosch- Tecnologie Diesel e Sistemi Frenanti Italia

1.942 Diesel engine injection pumps. Brakes components.

Modungo (Bari)

TIER ONE SUPPLIERS: DETAILED INFORMATION (1/2)

T1 S

uppl

iers



Dayco Europe 1.164 Power transmission, air-intake and engine cooling

Airasca (Turin)

Valeo 1.130 Lighting, electrical systems, motors, engine cooling etc

Santena (Turin)


885 Chassi, steering systems, powertrain, safety systems

Collegno (Turin)

Johnson Controls Italia 200 Electronic components for air conditioners.

Milan

TIER ONE SUPPLIERS: DETAILED INFORMATION (2/2)

T1 S

uppl

iers

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TurinDelphi Italia Automotive Systems

ValeoLear Corporation Italia

T.R.W Automotive ItaliaDayco Europe

Magneti Marelli Sistemi Sospensioni

MilanMagneti Marelli Sistemi Elettronici

Pirelli TyreJohnson Controls Italia

CurnoBrembo

TolmezzoAutomotive Lighting Rear Lamps Italia (Magneti Marelli)

Montecchio MaggioreFiamm Automotive Batteries

MantovaSogefi

BolognaMagneti Marelli Powertrain

BariBosch - Tecnologie Diesel e Sistemi Frenanti

FOR STRATEGIC REASONS THE T1 SUPPLIERS ARE MOSTLY FOUND NEAR THE HQs AND PLANTS OF THE OEMs

Source: STC

23

MANY T2 SUPPLIERS ARE SMALL, LOW VALUE ADDING FIRMS THAT FACE HARD COMPETITION FROM LOW-COST COUNTRIES

Cables, bus systems, embedded systems

ITT Industries Friction Products

ASK Industries

Power train, exhaust systems, engines

Fonderie Mario Mazzucconi

SKF Industrie Metelli Ufi Filters

Cockpit, seats, dash-board, air conditioning

Gammastamp Conceria Pasubio

T2 SUPPLIERS (examples of the largest ones)

T2 SUPPLIERS (examples of the largest ones)

Electrical systemsElectrical systems Interior equipmentInterior equipment PropulsionPropulsion BodyBody Running gearRunning gear

Body, roof, glass, doors, lighting etc.

Automotive Lightning Italia Rear Lamps (Magneti Marelli)

Olsa Federal Mogul

Operations Italy

Suspension, brakes, axles, steering, tires

Gruppo Sogefi Metelli Federal Mogul

Operations Italy Sila Holding

Industriale

Source: Anfia, Automobil Cluster

24


Sogefi 6.171 Filters, suspension and precision springs

Mantova

ITT Industries Friction Products

1.000 Electronic components Barge

SKF Industrie 944 Bearings Villarperosa (Turin)

Automotive Lighting Italia Rear Lamps

800 Lighting Tolmezzo

Gammastamp 730 Components for safety belts, doors etc

Bianzé

Metelli 420 Brake parts, engine parts, transmission

Cologno Monzese (Monza)

TIER TWO SUPPLIERS: DETAILED INFORMATION (1/2)T2

Sup

plie

rs

Source: Anfia, Automobil Cluster, Kompass

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Fonderie Mario Mazzucconi

388 Components for engines, transmission and brakes etc

Bergamo

ASK Industries 300 Car audio e antenna systems, amplifiers, cables etc

Reggio Emilia

Conceria Pasubio 250 Leather for carseats Arzignano, Padua

Ufi Filters 230 Filters Nogarole Rocca (Verona)

Federal Mogul Operations Italy

135 Components for lighting, friction and power cylinder systems

Turin

Olsa 51 Interior and exterior lighting components

Turin

TIER TWO SUPPLIERS: DETAILED INFORMATION (2/2)T2

Sup

plie

rs

Source: Anfia, Automobil Cluster

26Source: STC, interviews

Strategic cost reduction actions

Strategic cost reduction actions

Product portfolio specialization

Product portfolio specialization

Customer portfolio diversification

Customer portfolio diversification

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 with non-Italian customers.

Italian suppliers are now performing very well because of increasing exports and less dependence on Fiat Group.

Delocalization of Italian automotive suppliers: Production facilities established in low-cost countries (mainly for labor intensive operations)

Increase of sourcing volumes from low-cost countries Production capacity and workforce down-sizing

Italian automotive suppliers are slowly becoming more specialized (i.e. creating product portfolios with focus on core products, technologies and competences).

With these more specialized product portfolios suppliers are at the same entering similar non-automotive industrial sectors.

27




Manufacturers

Suppliers

Recommendations

References

CONTENT

28

THE ITALIAN PRODUCTION OF CONSTRUCTION EQUIPMENT TOTALS ABOUT SEK 43 BILLION- the industry grew with more than 8% in 2005

0

10

20

30

40

2002 2003 2004 2005

Domestic Export

Earthmoving Equipment

SEK 29 billion

Tower Cranes SEK 3 billion

Road Equipment SEK 3 billionbillion SEK Production machine and construction vehicles in Italy

Growth mainly a result of increases in exported volumes

Source: Committee for European Construction Equipment

Concrete Equipment

SEK 6 billion

Crushing, Washing, Sizing Equipment SEK 2 billion

29

TOTALLY THERE ARE ABOUT 300 COMPANIES ACTIVE WITHIN THE CONSTRUCTION EQUIPMENT INDUSTRY IN ITALY- But many companies are small and only active locally

Source: UCoMESA , Anima

CONSTRUCTION EQUIPMENT(examples of the largest companies in the industry)

CONSTRUCTION EQUIPMENT(examples of the largest companies in the industry)

ROADROAD

Bitelli (Catepillar Italia) Antec Marini CNH (Fiat Group) Fiori SpA

Graders, asphalt pavers, asphalt mixers

MININGMINING

Solimec Casagrande

Wheel loaders, drills, haulers

Komatsu Italia SpA CNH (Fiat Group) Astra Veicoli Industriali

(Owned by IVECO and part of Fiat Group)

Merlo SCAI SpA (Hitachi) Fiori SpA Macmoter SpA Euromach Srl

EARTH MOVINGEARTH MOVING

Excavators, wheel loaders, backhoe loaders, Skid steer loaders, haulers

LIFTINGLIFTING

Marchetti Autogru Raimondi Merlo Terexlift Amoc Veba Srl

Mobile cranes, forklifts

30Source: Kompass, UCoMESA, Anima,

Manufacturer Business Turnover (EUR m)

Employees Plant Purchasing decisions

CNH (Fiat Group) Escavators, skid steer loaders, backhoe loaders

€ 9 796 m 2.704 Modena HQ, Modena, Italy

Astra Veicoli Industriali

Dump-trucks, tractors € 211 m 480 Piacenza HQ, Piacenza, Italy

Merlo Telescopic handlers € 195 m 500 Cervasca HQ, Cervasca, Italy

Marini Asphalt pavers, paver finishers, cold milling planers etc

€ 85 m 370 Alfonsine HQ, Alfonsine, Italy

Bitelli (Caterpillar Italia)

Asphalt pavers and cold planers € 75 m 265 Minerbio HQ, Minerbio, Italy

Terexlift Lifting platforms € 50 m 130 Umbertide HQ, Umbertide, Italy

Casagrande Hydraulic Crawler Drills, piling equipment, crawler cranes

€ 39 m 250 Fontanafredda HQ, Fontanafredda, Italy

Raimondi Cranes € 32 m 42 Legnano HQ, Legnano, Italy

Amoc Veba Srl Truck cranes € 13 m 100 Poviglio HQ, Reggio Emilia, Italy

CONSTRUCTION EQIPMENT OEMs: DETAILED INFORMATION (1/2)

31Source: Kompass, UCoMESA, Anima,

Manufacturer Business Turnover (EUR m)

Employees Plant Purchasing decisions

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

Fiori Excavators, loaders, mixers, dumpers, backhoe loaders

€ 16.2 m 49 Finale Emilia (Modena)

HQ, Finale Emilia (Modena), Italy.

Euromach Excavators € 3.5 m 24 Montichiari (Brescia)

HQ, Brescia, Italy

Macmoter Excavators, skid track loaders, dozers, prime movers

€ 3 m 53 Modigliana (Forlì Cesena)

HQ, Modigliana (Forlì), Italy

Komatsu Wheel loaders, escavators, skid steer loaders

n/a n/a Vicenza HQ, Vicenza, Italy

Antec Steer skid loaders, cold planers n/a n/a Peschiera Borromeo

HQ, Peschiera Borromeo, (Milan), Italy

Soilmec Rotary rigs, drilling equipment n/a n/a Cesena HQ, Cesena, Italy

CONSTRUCTION EQIPMENT OEMs: DETAILED INFORMATION (2/2)

32

THE ITALIAN CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE REGION EMILIA ROMAGNA

FontanafreddaCasagrande

VicenzaKomatsuBrescia

EuromachMilanAntec

Raimondi

CervascaMerlo

PiacenzaMarchetti Autogru

Astra Veicoli IndustrialiPoviglio

Amoc Veba

ModenaCNHFiori

ModiglianaMacmoter

AlfonsineMariniMinerbioBitelli

CesenaSoilmec

UmbertideTerexlift

33




Manufacturers

Suppliers

Recommendations

References

CONTENT

34

MOST OF THE ITALIAN SUPPLIERS TO THE CONSTRUCTION EQUIPMENT OEMs ARE SMALL AND MEDIUM SIZED COMPANIES

Source:STC, interviews

Cables, sensors, semi conductors, control units

Undercarriage and bodyPower train, engines, exhaust systems, axles

SUPPLIERS(examples of the largest ones)

SUPPLIERS(examples of the largest ones)

Electrical systemsElectrical systems Propulsion and running gear

Propulsion and running gear Steel constructionSteel construction HydraulicsHydraulics

All kind of hydraulic cylinders

AccessoriesAccessories

All kind of accessories

Siemens Vdo TradingRobert Bosch

Bosch Rexroth C.A.M.I HydrocontrolHomberger Safim SpA

Italscania SpA Perlini International

SKF Italia Cararro SpA Bosch Rexroth SAIM Europe Srl

Berco SpA Cobo Case del Sedile Isringhausen Webasto product Italy

35Source: STC, Kompass, interviews


Business Purchasing decisions

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

Berco 3000 Accessories HQ, Ferrara, Italy

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

CONSTRUCTION EQUIPMENT SUPPLIERS: DETAILED INFORMATION (1/2)

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36


Business Purchasing decisions

Italscania 79 Steel construction HQ, Trento, Italy

Homberger 52 Hydraulics HQ, Genoa, Italy

SAFIM 52 Hydraulics HQ, Modena, Italy

CAMI 35 Hydraulics HQ, Padua, Italy

Siemens VDO Trading 30 Electrical systems HQ, Milan, Italy

Webasto product Italy 25 Acessories HQ, Milan, 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 and Hydraulics

HQ, Milan, Italy

CONSTRUCTION EQUIPMENT SUPPLIERS: DETAILED INFORMATION (2/2)

Con

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Source: STC, Kompass, interviews

37

THE SUPPLIERS TO THE CONSTRUCTION EQUIPMENT OEMs ARE CONCENTRATED AROUND MILAN IN THE REGION OF LOMBARDY

TrentoItalscania

BresciaCobo

PadovaC.A.M.I.Carraro

VeronaPerlini International

ModenaCasa del sedileSafim

FerraraBerco

MilanSiemens Vdo Trading

Robert BoschWebasto Product Italy

Bosch RexrothSaim

TurinSKF Itallia

GenuaHomberger

BolognaHydrocontrol

VareseIsringhausen

Source: STC, interviews

38Source: STC, interviews

In 2005 the Italian 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.

Weight of exports as part of total sales increases

Weight of exports as part of total sales increases

Increasing competition from far east countriesIncreasing competition from far east countries

Continuous growth in produced volumes

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 offering and increasing

the quality of the after sales service.

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.

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 Equipment industry

39




Recommendations

References

CONTENT

40

WHEN DOING BUSINESS IN ITALY LOCAL PRESENCE CAN MANY TIMES PROVE TO BE A GREAT ADVANTAGE

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.

Local presence important

Local presence important

Fragmented value chains

Fragmented value chains

Late paymentsLate payments

Country specific recommendations for doing business in Italy

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.

Local presence is often a great advantage. Italian companies are used to working closely with their counterpart and local presence with an Italian speaking representative is often an important success factor.

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

Differing rules and regulations


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THE ITALIAN AUTOMOTIVE INDUSTRY IS LOOKING FOR SUPPLIERS COMPETITIVE IN BOTH PRICE AND TERMS OF DELIVERY

DeliveryDelivery

PricePrice

Closeness to customer

Closeness to customer

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.

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.

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 criterion when the Italian automotive company chooses supplier.


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Overview Italian industry

Italian Automotive industry

Recommendations

References

CONTENT

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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.

Business support office

Business support office

Partner search Partner search

Market analysisMarket

analysis

Business start-up

Business start-up

Identification and evaluation of potential distributors, agents and suppliers. Initiate and conduct discussions with potential partners. Arrangement and realization of business meetings.

Local sale- and Key Account support. Back-office support: Economic administration, customer service, administration of personnel.

Formation of Italian subsidiary. Recruitment / head hunting Property search Assistance in merger & acquisition

Source: STC

44

STC IN ITALY HAS A VAST EXPERIENCE OF HELPING SWEDISH FIRMS DOING BUSINESS WITH THE ITALIAN AUTOMOTIVE INDUSTRY

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.

Examples of Swedish companies STC in Italy have worked with on the Italian market

Source: STC

Documents

Go Global Fordonsindustrin Italy