Dongfeng considers hybrid production in Italy

CHINESE manufacturer Dongfeng Motor is considering the production of 100,000 vehicles annually at an as yet undisclosed site in Italy, says Automotive News Europe.

It is understood the Italian government will offer the brand options for production sites within weeks, helping the Stellantis-aligned (via Fiat) manufacturer to bolster its reach in the European market.

Italy has been trying to attract another car maker to the country after clashing with Stellantis’ plans to cut jobs and move positions to lower-cost sites.

“Italy is one of Europe’s largest automotive markets, and for a Chinese car-maker, having local production means that you can supply all other countries in the area,” said Dongfeng Motor Europe head of operations Qian Xie.

The plan potentially sets up the Italian government and Stellantis for deeper ructions. Stellantis CEO Carlos Tavares said earlier this month that his company would have to make “unpopular decisions” were a Chinese electric vehicle manufacturer to set up shop in Italy.

“If someone wants to introduce Chinese competition, they would be responsible for the unpopular decisions that might have to be taken,” Mr Tavares said in Italy last week.

“If we are under pressure, the only one thing we could do is to accelerate our efforts to increase productivity to be competitive … then we might not need so many plants as we have now.

“We are ready to battle, but in a battle, there are casualties,” he warned.

Dongfeng Motor, which in addition to producing Citroen and Peugeot branded cars in China also partners with Honda and Nissan, is under pressure in its home market where demand for internal combustion engine powered cars is falling.

Since peaking in 2017 at 2.83 million deliveries, Dongfeng Motor sales fell 38 per cent to 1.72 million last year.

“In Italy, you can take advantage of all the strong legacy that the country has in the automotive industry,” added Mr Xie.

He said that despite Dongfeng Motor “strongly” believing in an electric future, it could currently focus on hybrid cars.

Italy is lagging its European peers in EV adoption. Last year, battery powered vehicles accounted for around four per cent of total new vehicle sales, well behind the EU average of almost 15 per cent.