Govt and Fiat-owner Stellantis agree on need to boost car production in Italy

By Giuseppe Fonte and Giulio Piovaccari

ROME (Reuters) -Italy’s Industry Minister and the head of Stellantis agreed on Monday on the need to boost automotive production in Italy, home to Stellantis brands including Fiat and Alfa Romeo, seeking to lift the figure to over one million vehicles.

Industry Minister Adolfo Urso said his ministry and the automaker aimed to sign a deal on Italian car production by the end of the month.

“The parties have agreed on the need to immediately intervene to reverse the negative trend of the latest 20 years,” Urso said after a meeting in Rome with Stellantis CEO Carlos Tavares.

Urso aims for Italy to lift production to more than one million vehicles in the coming years, a government official briefed about the matter told Reuters, without adding further details.

Stellantis, Italy’s major automaker, produced fewer than 700,000 vehicles in the country last year and in 2021, as it was hit by a global shortage of microchips and other components.

According to the FIM-CISL metalworkers union, the group’s output in Italy is expected to rise to around 800,000 units this year.

Fiat Chrysler, which merged with France’s PSA in early 2021 to create Stellantis, produced over one million vehicles in Italy for the last time in 2017.

The industry minister said he set out to the Stellantis CEO a plan developed by the government detailing production targets and how to reach them, the need to expand the number of models produced in Italy and to invest in R&D.

However, responding last week to calls from the Paris government to increase the number of locally made vehicles, including small EV cars, Tavares said “high cost” countries, such us France or Italy, could only be home for high value cars, to balance affordability for customers and profitability for the company.

Stellantis currently employs around 45,000 people in Italy, while according to local lobby association ANFIA, the whole automotive industry employs over 270,000 people in the country, directly and indirectly. It accounts for over 5% of Italian GDP.