Several reasons - the industrial revolution came somewhat late in Italy, so a lot of that undoubted mass engineering expertise is more recent than you might think. Much of Italy was effectively a peasant economy until quite late.I often used to wonder why their WW2 kit was so crummy, because their tradition of engineering is good.
Even when the war started Italian society wasn't properly deployed for the war effort.
The Italian war effort and equipment was laughably underfunded - Mussolini was asking for German kit, supplies, raw materials and energy supplies pretty much from the off. Mussolini had spent 20 years founding Italian strength on little more than bullshit and bluster - he was a journalist.
Italian soldiers were criminally underequipped - no great wonder that come the armistice of Sept 8 when they were supposed to join the allies most went home - "ritorno a casa" as the italians put it.
I remember (In Italy) the first time I ever saw some Italian WW2 tanks in an old newsreel of a military parade. I was something between shocked and amused - I know the British tanks were seriously lacking, but I'd rather go into battle in a Fiat cinquecento than one of those things.
Something on Italian tanks WW2 - may be an idea to support your jaw if not sitting down.