Prime Minister urges Fiat to increase car production in Italy

In a notable shift from her previous stance as a lawmaker, Italian Prime Minister Giorgia Meloni is now leading a campaign against Stellantis, the automotive giant formed from the merger of Fiat-Chrysler and PSA. Meloni, who once vehemently opposed the merger, is now advocating for economic patriotism by demanding changes to Stellantis' branding, including the renaming of a new Alfa Romeo model produced in Poland and the removal of Italian flags from city cars manufactured in Morocco. This escalating tension highlights the government's dissatisfaction with Stellantis' production decisions, particularly as Italy seeks to attract Chinese carmakers to establish operations within its borders. Despite the government's efforts, experts suggest that Meloni's administration is struggling to compel Stellantis to increase its investments in Italy. Unions report a significant decline in production, with output dropping over 25% in the first half of 2023. Several production lines, including those for the Fiat 500 and Maserati, have been halted, leading to reduced salaries for workers under Italy's short-term payroll subsidy scheme. The government has also taken legal action against Stellantis, seizing vehicles that misrepresented their Italian origins and banning the use of Italian city names for models produced abroad. In a bid to bolster the automotive sector, Italy plans to invest €750 million in 2025 and €1 billion annually starting in 2026. During a recent visit to Beijing, Meloni signed cooperation agreements with Chinese manufacturers, signaling a potential shift in Italy's automotive strategy. However, experts caution that while courting new partners may be beneficial, Chinese carmakers are unlikely to fill the void left by Stellantis in the near future, given Italy's high transport costs and other investment challenges.