Stellantis adds new models to avert Italy auto sector crisis

Stellantis vowed to replenish its Italian plants with new models over the next few years as part of a push to repair relations with government and union leaders infuriated by dramatic declines in production.

None of the company’s sites in Italy will be shut down, and 2026 capacity will increase, driven by the new entries, Mr Jean-Philippe Imparato, head of Stellantis’ enlarged Europe region, said during talks in Rome with unions and Industry Minister Adolfo Urso on Dec 17.

The carmaker plans to invest €2 billion (S$2.8 billion) in Italy in 2025, and committed to €6 billion in orders from its suppliers in the country, Mr Imparato said.

Under the plan, Stellantis foresees Italian production of 500,000 vehicles in 2025 and a 50 per cent increase in 2026 to around 750,000 units, he added. That is roughly the level of 2023.

Mr Imparato said he could not pledge to bolster production to one million units, as previously demanded by the Italian government.

“Next year will be tough,” he said during a press conference in Rome. “I don’t want to make promises I can’t keep.”

Stellantis, the multinational automaker forged from the merger of Fiat Chrysler Automobiles and France’s PSA Group, will build a new generation of Fiat 500s at its Turin Mirafiori plant in coming years. It will also start making vehicles on a new platform at its southern Italian Pomigliano facility, it said.

For its part, the government led by Prime Minister Giorgia Meloni has said it is ready to spend more than €1 billion for the sector in 2025.

Stellantis chairman John Elkann has been under pressure to halt a plunge in car production that has put the group’s roughly 40,000 jobs in Italy at risk. Dec 17’s announcement comes after the carmaker ousted chief executive Carlos Tavares earlier in December.

While automakers across Europe are struggling with waning demand for electric vehicles and increasing competition from Chinese manufacturers such as BYD, Italy’s situation was exacerbated by Mr Tavares’ decision to move production of some Stellantis models to lower-cost countries like Poland.

“After Tavares’ resignation, the atmosphere has changed, and today’s plan proves it,” Mr Urso said at the press conference. 

The new push from Stellantis is a marked contrast to what is happening in Germany, where rival Volkswagen is locked in difficult talks with unions on a plan that may see the automaker shut plants in its home market.

Mr Tavares had cited high energy costs and the lack of transportation infrastructure as reasons for shutting Italian plants such as Mirafiori for weeks. His push to produce in cheaper countries led to a series of clashes with Rome.

Since ousting Mr Tavares, Mr Elkann has made efforts to reassure governments in Italy and abroad on future investments. 

The group’s recent focus on Italy has raised alarm bells in neighbouring France. Mr Elkann met President Emmanuel Macron at the Elysee Palace in Paris on Dec 16 to offer reassurances on Stellantis’ commitments to the country, the Elysee said in a statement. BLOOMBERG