ROME -- The Italian Parliament approved a package of incentives to encourage sales of fuel-efficient combustion engine cars as well as electric and hybrid vehicles, two lawmakers told Reuters.
Italy will join France, Spain and Germany in helping the auto industry, which has been hammered by the coronavirus crisis.
Like France and Spain, Italy will also offer subsidies for combustion engine cars that meet the EU's latest Euro 6 emissions standard because electric and hybrid cars still have a limited presence in Italy.
Last year, electric cars accounted for just 0.56 percent of total Italian registrations, with hybrids at 6.1 percent, according to foreign car manufacturers association UNRAE.
Marco Opipari, an analyst at Fidentiis, said cars produced in Italy before the lockdown and left unsold were all Euro 6 vehicles. "If you want to address this backlog of unsold cars and provide oxygen to the industry, you need to support purchases of combustion engine cars too," he said.
Rome will offer buyers of Euro 6 vehicles with a net price below 40,000 euros and CO2 emissions of up to 110 grams per kilometer an incentive of 1,500 euros ($1,680) if they scrap cars that are 10 years or older, according to the legislation voted on by the Lower House's budget committee.
The total incentive will reach 3,500 euros when including a further 2,000 euros to be shouldered by dealers. The package passed by the Lower House, will now have to be approved by the senate.
The existing subsidies for electric and hybrid cars will also be bolstered.
The legislation will be in force from August until December, with the costs to be shared between the government and car dealers.
Fiat Chrysler, Italy's largest automaker, is only now rolling out its first alternative-engine models, with a full- electric version of the Fiat 500 minicar and plug-in hybrid versions of Jeep's Renegade and Compass models due this summer.
New-car registrations in Italy fell by almost half a million, or 46 percent, in the first half of this year, according to transport ministry data.
The number of lost registrations could total around 700,000 units by the end of 2020, UNRAE said.