Stellantis plans to make two more hybrid cars in Italy to appease politicians

Stellantis NV will propose building two more hybrid vehicles in Italy, according to people familiar with the matter, part of a bid to appease local politicians as the Fiat maker eyes moving some production to lower-cost countries.

The manufacturer intends to assemble hybrid versions of a Jeep model at the Melfi site in southern Italy and of the Fiat 500 at the Mirafiori plant in Turin, the people said, declining to be named because the information isn’t public yet. The cars would protect production in case of a prolonged electric-vehicle downturn, they said.

Chief Executive Officer Carlos Tavares will present the proposal at a meeting with local unions on Monday in Turin, the people said. The move would help with the company’s efforts to reach 1 million vehicles in the country by 2030, from around 750,000 last year, even as EV demand is slowing.

A representative for Stellantis declined to comment.

Tavares has been overhauling Stellantis’s industrial footprint — including stringent cost cuts — at a time when governments in Europe are trying to safeguard manufacturing jobs put at risk by the shift to EVs.

The carmaker’s plans in Italy will depend on the level of support the company gets from the government and unions, the people said. Talks on domestic car production between Stellantis, the Italian government and local unions will continue after Monday’s meetings, they said.

Earlier this month, Italy’s financial police seized dozens of Fiat Topolinos which they said carried the national flag despite being assembled in Morocco, in the latest conflict between Giorgia Meloni’s government and the carmaker. The spat also forced Stellantis to rename a new Alfa Romeo sport utility vehicle that’s manufactured in Poland.

At an event Monday in Turin presenting the new Lancia Ypsilon hatchback, Tavares defended the company’s commitment to the country.

“When we created Stellantis in January 2021, Lancia was about to disappear, there was no product plan," Tavares said. “We gave Lancia a new future."

While the Ypsilon will be assembled in Spain, it was designed, engineered and tested in northern Italy, Tavares said, adding that “in terms of intangible assets, this is a pure Italian product."

That may not be enough for the government and unions, which have been clamouring for more models to be built locally.

Thousands of Italians joined striking workers near the carmaker’s base in Turin last month in anticipation of a new round of job reductions. The government in Rome, meanwhile, has been holding talks with carmakers including Tesla Inc., China’s BYD Co. and Dongfeng Motor Group Co., about producing in the country.

The Ypsilon marks the rebirth of Lancia, brand CEO Luca Napolitano said at the same event. Two more Lancia models will follow in 2026 and 2028.

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