In a significant declaration to parliament, Stellantis President John Elkann underscored the challenges that lie ahead for the automotive giant in 2025, a year he described as crucial yet fraught with difficulties due to a significant downturn in the Italian market. Despite this, Stellantis plans to invest in Italy, aiming to revitalize its operations amidst the prevailing economic downturn. Elkann reported that the Italian market plunged by 7% in the first two months of 2025 compared to the same period the previous year. This downturn, he noted, is part of a broader pattern affecting the European automotive sector, sparking concerns among automakers.
“2025, as we clearly said at the business and made in Italy industry talks, will be another difficult year: the Italian market in the first two months is down 7% compared to the same period last year; from 2026, an increase in production is expected thanks to the launch of 10 new product updates in Italian factories whose production levels will depend on the market and external factors such as duties,” stated Elkann. This message reveals a cautious optimism for the future with an indication that changes are on the horizon, provided that market conditions are favorable.
Elkann's remarks came as Stellantis grapples with significant headwinds, not only from market contractions but also from competition with emerging electric vehicle (EV) manufacturers and ongoing shifts in consumer preferences. The challenges faced by Italian automakers highlight the urgent need for strategic innovation and investment.
In stark contrast, Chinese automaker BYD has been actively scouting potential locations for its third European manufacturing plant, with Italy emerging as a prominent candidate. Alfredo Altavilla, BYD's special adviser for the European market, confirmed this prospect during a press briefing, highlighting that the selection process is expected to conclude by the end of the year. However, he also pointed out the complexities posed by the current European market environment. “Fighting China is futile—cooperation is a smarter move,” he emphasized, advocating for a collaborative approach as the best strategy in facing the challenges posed by fierce competition.
Altavilla's remarks reflect a recognition of the severe competitive advantage that Chinese manufacturers have, particularly in electric and autonomous vehicle technologies. He displayed a sense of urgency, suggesting that European nations, including Italy, should reconsider their stances towards Chinese investments if they hope to remain competitive. In this context, he argued that policies unfriendly to Chinese automakers could complicate the siting of the new BYD plant, as Italy has previously supported EU tariffs against Chinese vehicles.
“Locating the new plant in a country unfavourable towards Chinese automakers would be challenging,” said Altavilla, underscoring the delicate balance between national trade policies and investments. This may signal a shift in attitudes as European markets and manufacturers seek to recalibrate their approaches to foreign investment amidst ongoing economic dynamics.
Amid these discussions on foreign investment in the European automotive landscape, BYD has already secured partnerships with influential Italian component suppliers like Brembo, Pirelli, and Prima Industrie for its existing factory in Hungary. This indicates a clear pathway for collaboration and investment between Chinese companies and European suppliers, fostering a more interconnected industry landscape.
Altavilla remarked, “Suppliers will not be forced to relocate and will instead position themselves in proximity to BYD's new facility,” showcasing a willingness to adapt and create synergies within the supply chain. Furthermore, BYD is considering creating a proprietary charging network in Europe reminiscent of its strategy in China, which would enhance its operational capabilities significantly.
In drawing contrasts between American and European strategies regarding Chinese investments, Altavilla pointed out the differing approaches taken by the two regions. He described the approach of former President Donald Trump, which encourages investment to avoid tariffs, as “more constructive” compared to the EU's method of imposing tariffs and then trying to attract investments subsequently. This highlights a fundamental difference in tactics that could shape future relationships between foreign automakers and European markets.
As 2025 approaches, the automotive industry finds itself at a crucial juncture where both challenges and opportunities persist. The actions taken by Stellantis in Italy signal a commitment to innovate and adapt, while the interest from BYD points towards the increasing significance of collaboration and strategic partnerships across borders. The coming years will undeniably shape the future of the European automotive landscape, determining how well it can compete in a globalized market filled with both risks and possibilities.
