Initial negotiations

China's Dongfeng ready to produce 100,000 cars in Italy

Chinese car giant Dongfeng Motor Group is in initial talks with the Italian government to produce 100,000 cars in our country

16 April 2024

2' min read

Chinese car giant Dongfeng Motor Group is in initial talks with the Italian government to produce cars in our country.

Dongfeng, partner of Stellantis, is considering a plant in Italy with the capacity to produce more than 100,000 vehicles a year, Qian Xie, head of operations in Europe, said on Tuesday. Italy is trying to lure another carmaker to the country after clashing with Stellantis' plans, which were deemed detrimental to Italy.

Potential hub for Europe

"Italy is one of Europe's biggest car markets and for a Chinese car manufacturer to have local production means being able to supply all the other countries in the region," Xie said in Milan on the sidelines of an event of Voyah, the new brand of Dongfeng, one of the top three car manufacturers in China. Voyah is launching in Italy during Design Week and Fuorisalone 2024 in Milan.

Urso in search of other producers

Enterprise and Made in Italy Minister Adolfo Urso recently said and reiterated that Italy needs more car manufacturers, not just Stellantis therefore, with an opening to the Chinese industry.

'Discussions with the Italian government are at an early stage: they want to establish a relationship of trust and then go deeper,' Xie said.

On the advantages that Italy can offer, Xie explains: 'Italy is very interesting because of its long automotive culture, as well as the availability of ports (to and from which to transport finished products and components).

Tensions with Stellantis

Talks with Rome are ongoing and the government will offer Dongfeng some options for production sites in the coming weeks. The plan could put the government and Stellantis in a more tense situation. CEO Carlos Tavares warned earlier this month that he would have to make 'unpopular decisions' if a Chinese electric vehicle manufacturer were to set up in Italy.

Dongfeng under pressure in China

Dongfeng Motor, which in addition to producing Peugeot and Citroen cars under the Stellantis brand in China, also works with Honda and Nissan, is under pressure at home where demand for petrol cars is falling. After peaking in 2017 with 2.83 million deliveries, Dongfeng's sales fell to 1.72 million last year, a 38 per cent drop.