The car industry is buoyant. Recent data from Centro Studi Promotor (CSP) notes that the sale of new cars in Italy in 2005 totaled 2,234,174.This reflects the general buoyancy considering the increased gasoline prices, the weak economic situation and the fiscal burden on car ownership. This is the ninth consecutive year that new car sales in Italy have exceeded 2,230,000 which proves that the market is relatively stable. Italian brands lost 1.46% while foreign brands lost 1.30%.Italian brands (the dominant Fiat Auto Spa) claimed 28.04% of the market share and manufactured four out of every ten best selling cars. The main international brands included-GM (Opel and Chevrolet), Ford (Ford+Mazda+Land Rover+ Volvo), Volkswagen (Volkswagen+Audi+Skoda).
The fiscal burden on the ownership of cars is a stark reality. In 2003, the Government hiked taxes on luxury cars and sports utility vehicles in a bid to reduce the deficit budget and control pollution. Vehicles weighing more than 2600 kilos were subject to higher taxes.
The chief components of the generic strategy are-cost leadership, differentiation and market segmentation.