Italian auto industry eyes Chinese assistance to boost production

Although relations between the Italian government and Stellantis are on the mend, achieving the developmental goals of the Italian automotive industry may require outside help. Enter a Chinese conglomerate, keen to break into the European market, which might just be the solution needed.

Italy, a heavyweight in the automotive world, is currently experiencing a slump in its industry. For months, a noticeable dispute has persisted between the Italian government and the Stellantis conglomerate over the company's investment in factories and infrastructure in Italy.

Despite the media spotlight hastening progress in talks, Italy is determined not to put all its eggs in one basket with Stellantis. At present, Italy's annual car production stands at about 880,000 units. Negotiations with Stellantis, led by Carlos Tavares, could bump this figure up to 1.1 million, yet the Italian government is aiming for a significant leap to 1.43 million units annually.

Chery's involvement could involve either acquiring an existing facility or setting up a new one. However, Italy faces a challenge, as Chery is also eyeing a closed Nissan factory in Barcelona. This puts the Chinese conglomerate in a strong negotiating position.

Chinese manufacturers are actively looking to set up factories in Europe or find regional subcontractors. This strategy is a direct response to European regulations that will soon impose additional tariffs and fees on vehicles produced and imported from China.