Cars, are the Chinese coming? Here is how many jobs they could create in Italy

Only a month ago the giant BYD, which has become the global number one in the production of battery-powered and plug-in hybrid cars in record time (target 4 million and +33% in 2024), signed an agreement with Turkey. A billion dollar investment, for a plant near Izmir, decided at the highest level. An agreement signed by the Turkish and Chinese presidents, Erdogan and Xi. Production will begin (capacity 150,000 vehicles per year) by 2026, with the creation of 5,000 direct jobs. A research and development centre on sustainable mobility technologies is also planned. BYD's move follows the one made in April by Chery, another leading Chinese player, for 21 consecutive years the Dragon's biggest exporter: just under 1 million vehicles a year. Chery has chosen Spain, Europe's second largest manufacturer, for a first operation brownfield: a former Nissan plant in Barcelona and a JV with a local player. The expected direct jobs are 1,250.

And Italy? The government, for now, has signed Non-disclosure agreements/MoU with Dongfeng, BYD and Ayways. According to the global consultancy firm AlixPartners, the installation of a production platform for 150 to 200 thousand vehicles per year could employ 9 to 11 thousand people, including manufacturer and supply chain employees. The employment benefits could be even higher considering the indirect induced activities, such as services. And the choice to produce in Europe, for the Chinese, does not depend only on thenew European duties. "The history of the industry," explains Dario Duse, Emea co-leader of the Automotive & Industrials practice and Italy Country Leader of AlixPartners, "teaches that, for significant volumes, vehicles must be assembled regionally. As for components, 'in Italy there are excellences related to steel processing - such as body parts, drive shafts, suspensions - or even electronics. Ensuring a close and reliable supply can be a risk containment strategy'.

One crucial aspect is the skills. 'The most sought-after skills by car manufacturers, over 50% of the total,' continues Duse, 'are and will increasingly be in electronics and IT. The automotive sector, however, is hardly attractive for electronic engineering and IT graduates, who often prefer electronics and IT consultancy companies. In Italy, however, there is strong expertise in software integration, advanced technology machinery for the production of key components also for the new electric and software-defined vehicles. This is the case of Ima Automation, which is one of Europe's two leading manufacturers of assembly lines for electric motors and battery packs'.

The distinctive and advanced skills, therefore, are there. But to date they only cover some of the key domains of the car of the future and are smaller in size than foreign companies. "Areas such as software defined vehicles (in which functionalities - such as over-the-air updates, customisation, services - and performance are controlled and managed mainly through software rather than just hardware, ed.), shared mobility, manufacturing 4.0 (including advanced robotics and big data analytics, ed.) and artificial intelligence, in respect of which the location of a development centre would bring lymph for innovation, are uncovered. Italy is battling in a highly competitive market and to attract sustainable investment, not only additional incentives should be considered, but also the public cost per job lost, which could range between 27 thousand and 51 thousand euros, depending on the time of redeployment,' adds Duse.

As for the research and development chapter, Italy, concludes AlixPartners' manager for Italy, would lend itself well to hosting a centre, not only for reasons of undisputed historical expertise. "On average, the cost of an engineer in the UK and Germany is 20% and 80% higher, respectively, than that of an Italian professional, and this difference is even more marked for recent graduates. Given the development in some metropolitan areas, even a Chinese engineer can be more expensive than an Italian, whereas India is cheaper.