The Italian government would be holding discussions with the Chinese automaker Chery Auto as part of efforts to attract major car manufacturers to the country, said two sources to Reuters.
Indeed, Rome aims to increase the country’s national production to 1.3 million units per year from less than 800,000 in 2023.
Authorities are also in talks with Stellantis, the country’s sole major car manufacturer, to increase the group’s production to one million units annually by the end of this decade, a total it last reached in 2017.
Industry Minister Adolfo Urso has stated that Italy wants a second manufacturer to add about 300,000 vehicles to national production.
If the discussions are successful, Chery would be among the first Chinese automakers to have manufacturing presence in Europe, intensifying competition with local traditional manufacturers, especially in the electric vehicle (EV) segment.
Urso said last month that Italy had held talks with Tesla and three undisclosed Chinese firms, whose representatives visited the country last year to assess potential investment opportunities.
One of the two sources stated that Chery was currently the option Rome was “betting on” the most.
Chery Europe’s CEO, Jochen Tueting, told Reuters that the Chinese automakers expects sales in Europe to be high enough to support a local assembly plant.
“We are exploring different possibilities across Europe to seek a possible setup for local manufacturing for the future,” Tueting said.
“We are holding discussions in various places in Europe right now,” he added.
However, he indicated that confidentiality agreements prevented him from commenting on specific locations.
The sources, one from the industry and the other from the government, declined to be identified because the discussions are confidential.
The industry source said that Chery was considering either renovating an existing plant or building a new one in Italy but was also evaluating other options in Europe, including a former Nissan plant in Barcelona.
The government source said that Great Wall Motor was also one of the Chinese automakers in contact with Rome and visited Italy, although the company did not respond to a request for comments.
Price war and high tension
Car manufacturers in contact with Italy also include the Chinese EV giant BYD.
But BYD, which last year surpassed Tesla as the world’s largest electric vehicle company by sales, said in December that it would build its first European plant in Hungary.
It has not said whether it has plans for a second facility in Europe.
In addition to the aggressive price war shaking the EV sector, trade tensions are rising between China and the European Union, which is investigating whether Chinese EV manufacturers benefit from unfair government subsidies.
Establishing manufacturing capacity in Italy or Spain, where EV sales are low compared to other countries, would fit Chery’s strategy of selling a mix of internal combustion engine, hybrid, and fully electric vehicles, the industry source added.
The company is launching its Omoda and Jaecoo brands in key European markets.
By the end of 2025, Chery plans three SUV models for each brand with a mix of fuel types to serve different parts of Europe.
Electric vehicle sales are higher in Northern Europe than in southern markets.
