Dongfeng to build cars in Italy with some help from Meloni?

The Italian government under Giorgia Meloni has been looking for a new local car manufacturer to boost the Italian auto industry. According to Reuters, the government has entered “advanced talks” with the Chinese manufacturer Dongfeng to build a new auto plant in the country. The deal would also include support from the government and other key Italian investors.

After reports earlier this year that the nationalist government under Meloni and its minister for Enterprises Adolfo Urso were trying to court the rapidly growing Chinese manufacturer BYD to bring production to Italy, it seems that the state-owned Dongfeng is the prime candidate to build a new auto plant to boost local production.

Confidence in Stellantis gone

The Italian government wants to increase its yearly auto production from around 750,000 vehicles in 2023 to 1.3 million units, and it seems to have lost confidence that Stellantis (currently the only Italian manufacturer that owns local brands Fiat, Abarth, Alfa Romeo, Maserati, and Lancia) can achieve this number.

Indeed, the tensions between Stellantis and Meloni’s government have increased recently. Italy isn’t happy that Stellantis is moving the production of more ‘Italian’ cars to countries like Serbia and Poland, with the Fiat Grande Panda and 600e as prime examples. To retaliate, it has prevented Alfa Romeo from using the ‘Milano’ name for its new compact SUV, also built in Poland, which has been renamed ‘Junior’ instead.

Win-win situation

Meanwhile, Dongfeng could profit from Italian aid to build a European production facility and circumvent the new import tariffs from the European Commission, which are meant to prevent cheap state-funded Chinese EVs from flooding the European market. Dongfeng entered Europe earlier this year with its ‘premium’ EV brand Voyah.