TURIN (Reuters) – Production of Chinese cars in Italy could force Stellantis to make difficult decisions, including factory closures, the chief executive of the Franco-Italian-American automaker warned on Wednesday.

The Italian government said it was in discussions with Tesla and Chinese car manufacturers, including Chery Auto, to encourage one of them to produce on Italian soil and increase national production after several years of decline.

“If someone wants to introduce Chinese competition, they will be responsible for unpopular decisions that may have to be taken,” Carlos Tavares said during an event in Turin.

“If we are under pressure, the only thing we can do is accelerate our efforts to increase productivity in order to be competitive,” he added.

Carlos Tavares also indicated that Stellantis would likely lose market share and sales volume.

“It might then be that we don’t need as many factories as we have now,” continued the Stellantis CEO. “We are ready for battle, but in a battle there are casualties.”

Carlos Tavares, however, dismissed as “fake news” speculation that his group intended to disengage from Italy.

The group cites as proof the announcement of the extension until 2030 of the production of the thermal version of its best-seller Fiat Panda, manufactured in Pomigliano d’Arco near Naples, and the end of which was scheduled until now for 2027.

An all-new electrified version of the car is due to launch this year.

Stellantis also announced an additional investment of 100 million euros to “strengthen the potential of the iconic Fiat 500e, and inaugurated a production site for electrified gearboxes (eDCT) for hybrid cars in the Turin Mirafori complex.

(Giulio Piovaccari, Gilles Guillaume for the , edited by Kate Entringer)

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