Following the footsteps of BYD and Chery, another Chinese car manufacturer might be on the verge of opening a factory in Europe. Just weeks after BYD announced its plan to build a plant in Hungary and days after the news that Chery will start manufacturing cars in Spain, another Chinese automaker seems ready to commence vehicle assembly on European soil.
The Italian government has initiated negotiations with the Chinese group Dongfeng to attract an investment for an automotive plant in the Peninsula, according to sources close to the discussions.
As per sources from Bloomberg, Dongfeng Motor Corporation, a partner of the Stellantis group in China, is considering an investment in Italy to develop an annual production capacity of over 10,000 vehicles. The information regarding the negotiations and potential investment has been confirmed by Qian Xie, who leads Dongfeng’s operations in Europe.
Italy has been trying for several months to attract a new car manufacturer to the country, especially after entering into a conflict with the heads of the Stellantis group – which includes Italian brands Alfa Romeo, Fiat, and Lancia – over production plans and job retention.
«Italy is one of the largest auto markets in Europe, and for a Chinese auto manufacturer, having local production means you can supply all the other countries in the area,» Qian Xie stated in an interview in Milan.
Discussions with officials in Rome are ongoing, and the government will provide Dongfeng with several options for production locations in the coming weeks, he mentioned.
However, this plan could bring the government and Stellantis into even more complicated positions and could have disastrous effects on the peninsula’s auto industry. This is because Stellantis’ CEO, Carlos Tavares, warned earlier this month that he would have to make «unpopular decisions» if a Chinese electric vehicle manufacturer settles in Italy.
Dongfeng Motor Corporation, which manufactures Peugeot and Citroen automobiles under the Stellantis group in China, is under pressure in its own country due to a decline in demand for gasoline-powered cars, and has big expansion plans that include Europe. It would thus follow the path opened by its compatriots from BYD and Chery.
For now, it is certain that from a peak of 2.83 million cars sold in 2017, Dongfeng’s sales dropped last year by 38%, to just 1.72 million.
«In Italy, you can take advantage of the strong heritage the country has in the auto industry,» Xie further mentioned, adding that although Dongfeng «strongly» believes in an electric future, for now, in Italy, the car manufacturer will have to focus on hybrid cars.
Indeed, Italy seems a perfect destination for the production of models with hybrid propulsion systems. As diesel engines have almost disappeared from the market, and electric ones account for only about 4% of total sales – well below the European average of 15% – gasoline and, especially, hybrid cars, are likely to become the target of many customers.
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