The Italian government has lofty goals for its auto industry, seeking to boost production of vehicles made in the nation from 800,000 in 2023 to 1.3 million per year.
Despite having the automotive giant Stellantis (STLA) in its backyard, the country is looking to expand its output, and is attracting a rather controversial automaker to potentially set up shop within its borders.
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As per a report by Bloomberg, the Italian government is in early talks with Chinese automaker Dongfeng, looking to coax the company into potentially setting up shop in the country to help sell its cars internationally.
Quan Xie, the state-owned company's European operations head, said that the automaker is weighing the possibility of opening a plant that would produce more than 100,000 vehicles per year in the form of hybrids or EVs. In remarks, he says that Italy's central location in Europe would open up the rest of Europe and allow Dongfeng to its cars beyond its borders.
“Italy is one of Europe’s largest automotive markets and for a Chinese carmaker having local production means that you can supply all other countries in the area,” Xie said.
The talks with the Italian government are related to recent courtship that Italy has been conducting to attract overseas car manufacturers, including the likes of BYD (BYDDY) and Elon Musk's Tesla (TSLA) , encouraging them to build vehicles within the country.
Xie also added that producing its cars in Italy would benefit Dongfeng, given the country's reputation and prowess as a car-producing nation.
“In Italy, you can take advantage of all the strong legacy that the country has in the automotive industry,” Xie said.
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Dongfeng is a state-owned automaker that has multiple joint ventures to produce and sell 'foreign' brands in China's domestic market, including the likes of Honda, Nissan, and most critically; Stellantis. In China, Dongfeng has a joint venture partnership to make Peugeot and Citroën vehicles in the country, but Stellantis CEO Carlos Tavares has a problem with the Italian government attracting brands like Dongfeng to Italy.
As per Reuters, the CEO warned that introducing Chinese manufacturers into Italy would threaten Stellantis and result in “significant social consequences,” noting that the automaker may need fewer plants in the country if another carmaker were to gain market share.
“We are ready and we are ready to battle, but when there’s a battle you may have casualties,” Tavares said. “Don’t expect to come out of the battle without scars.”
Dongfeng currently does not sell any vehicles in Italy or Europe, but it plans to launch its first car — the M-Hero 1 off-roader — soon. The hefty beast, which features a 1,000 horsepower powertrain, is set to release first in Switzerland, and then Germany at a retail price of about $160,000.
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