TURIN - Carmakers are slashing prices and offering new marketing deals in Italy to prevent a collapse in sales following the end of scrapping incentives.
Auto executives expect sales to decline for the rest of this year, but stabilize next year at a level higher than before the cash discounts began in January 1997.
The third phase of incentives ended on 31 July. About 313,000 orders were received in July, according to the Italian importers association.
New-car registrations in July rose 3.2 percent to 254,500, Italy's best July ever.
The government paid out L1.5 million ($850) on a new-car purchase when buyers traded in a vehicle at least 10 years old. Carmakers matched the incentive. The discounts have been tied to fuel consumption since February.
Carmakers began lowering prices when the program ended. Fiat cut the price of its entry-level Panda 22.9 percent to L9.95 million ($5,685), making it Italy's only model under L10 million. Other Panda models were cut by 13.4 percent to 20.2 percent.
Nissan Italia carried over its existing scrapping incentive until 31 October. Nissan will maintain a L3.65 million ($2,085) discount on the Primera and Almera and L3.3 million ($1,857) on the Micra.
Chrysler introduced the largest zero-interest-rate financing deal ever offered in Italy: L40 million ($22,857) for 48 months on the Voyager and for 30 months on the Jeep Cherokee.
The incentives revived the Italian car market. Sales of 4,011,421 cars during the incentive period were 63 percent higher than in the previous 19 months.