Italian auto sector eyes Chinese support amidst Stellantis tensions

Although relations between the Italian government and Stellantis are seeing signs of improvement, the developmental goals of the Italian automotive industry also need support from outside sources. A Chinese conglomerate, keen to enter the European market, might provide the needed assistance.

Despite Italy being a major force in the automobile world, its automotive sector is currently going through a challenging time. For several months, there has been a notably loud disagreement between the Italian government and the Stellantis conglomerate. The main issue revolves around the conglomerate's investments in factories and infrastructure in Italy.

While discussions are progressing — partly because the media have brought attention to the matter — Italians are looking beyond just Stellantis. At present, Italy has an annual car production of about 880,000.

Negotiations with the conglomerate led by Carlos Tavares could potentially increase this figure to 1.1 million, but the Italian government is aiming for an annual production of 1.43 million vehicles.

So, how to bridge the gap of 330,000 vehicles? According to Reuters, the Italian government is engaging in discussions with Chery Auto. This Chinese conglomerate, owner of the Omoda brand among others, is expanding its presence in Europe, including in Poland.

The involvement of Chery could come through either the purchase of an existing facility or the establishment of a new manufacturing centre. However, a significant issue for Italy is Chery's consideration of acquiring a currently shuttered factory in Barcelona from Nissan. Hence, the Chinese conglomerate holds a strong negotiating position.

Chinese manufacturers are actively working towards setting up factories in Europe or finding subcontractors in this part of the world. This is largely due to regulations being introduced by European countries, which will impose additional tariffs and fees on vehicles produced in and imported from China.