The €204,000 ($250,920) Ferrari 458 Italia has never been a common sight, even on the autostrade of its native Italy. Today it’s becoming even rarer as austerity measures spur owners to export supercars by the truckload. A tax crackdown on luxury goods, combined with budget cuts that have pushed Italy deeper into its fourth recession since 2001, is souring demand for sporty cars and other symbols of the country’s fashionable lifestyle. The number of secondhand high-performance cars exported from Italy nearly tripled to 13,633 in the first five months of 2012, from 4,923 a year earlier, according to auto industry group Unrae.
“Italy is one of the strongholds of supercars, and those vehicles are now disappearing from the streets,” says Giuliano Noci, associate dean of Milan Polytechnic’s business school. “This has a huge symbolic value and shows how deep the crisis is.”
The exodus reflects weaker overall demand for high-end autos in the home of Ferrari and Maserati, Fiat’s most profitable brands. Sales of super-luxury cars in Italy are forecast to plunge 47 percent to 593 vehicles this year from 1,116 in 2008, according to IHS Automotive, which predicts that sales won’t return to pre-crisis levels before 2016.
Prime Minister Mario Monti’s government is implementing €20 billion in austerity measures as the country grapples with its €1.9 trillion debt. The economy has contracted for four straight quarters, and unemployment has surged to a near-13-year high as consumer spending and industrial output slump.
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 demand for supercars could further sour Fiat on Italy and accelerate a shift to stronger markets such as the U.S. and China.
Italy has become a declining source of supercar profits ever since Monti raised ownership levies on high-performance vehicles as part of his budget reforms. After the changes, owners of the €316,000 Lamborghini Aventador pay about €8,400 a year in taxes, an increase of €6,600.
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, in search of tax evaders. Officials stop high-priced vehicles to check whether their owners declared sufficient income—and paid enough taxes—to support their lifestyles.
Near Venice last month, the financial police, a separate force from regular cops, arrested a 44-year-old man driving a Ferrari F40 for not paying €8 million in taxes since 2006. In a July sweep in Bergamo, police found that the driver of a €200,000 Ferrari F131 had evaded €3 million in taxes since 2007. “Many Ferrari owners want to get rid of their supercars after the financial police came to one of our events near Rome and checked every driver,” says Fabio Barone, who heads the Ferrari owners’ club Passione Rossa. One of the members put a Ferrari 458 up for sale for €143,000 after buying it for €224,000 last year, he says.
Barone says he has received calls from dealers in France, Germany, and Eastern Europe inquiring about vehicles that might be available. Some owners looking to unload their cars are simply listing them on automotive websites. Others sell them via Ferrari’s pre-owned car program. The number of secondhand Ferraris and Maseratis leaving Italy jumped to 424 cars from 142 through the first five months of the year, according to Unrae.
It’s not just Ferraris. Every week about 200 secondhand Porsches leave Italy for other European countries, according to Loris Casadei, head of Porsche in Italy. Exports of used Porsche Cayennes more than tripled to 1,134 vehicles in the first five months of 2012. “The high-end car market is one of the more resilient to the crisis, and Italy is punishing it—not a wise decision,” says 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 abroad for cars such as the four-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. Although Montezemolo supports the fight against tax evasion, he disagrees with the “demagogic spectacularization” of those efforts.
The global expansion by Ferrari, Maserati, and Lamborghini won’t 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,” says the club’s president, Barone. The Dolce Vita era “is far behind us.”