Meloni’s head-on collision with Italy’s only carmaker

GROSSETO, Italy — Giorgia Meloni has found the ideal target in her economic patriotism crusade.
Over the past months, the Italian government has engaged in a widening array of conflicts with Stellantis — the heir of Italy’s iconic carmaker Fiat, now one of the world’s biggest carmakers — for not investing enough in Italy.
Stellantis — which owns a dozen brands spanning from Alfa Romeo and Maserati to Peugeot, Citroën and Jeep — has long been in the crosshairs of Meloni.
When she was a lawmaker on the opposition benches, she was one of the fiercest opponents of the Franco-Italian merger between Fiat-Chrysler and Peugeot-maker PSA, which gave birth to Stellantis in 2021. Back then, Meloni warned that the deal was a dangerous French take-over of an Italian crown jewel, fueling the evergreen Franco-Italian economic rivalry.
Now she’s in power, the right-wing prime minister is upping her fight against Stellantis in the name of economic patriotism by forcing the company to change the name of a new Alfa Romeo model built in Poland and removing Italian flags from city cars made in Morocco.
Even if a significant part of its cars are made outside Italy, Stellantis is currently the only major carmaker left in the country. The group owns all Italy’s legendary car brands except for Ferrari, which is an independent company, and Lamborghini, which is now owned by Germany’s Audi.
As this tension between the government and Stellantis simmers, Rome is now courting Chinese carmakers to open plants in the country.
“You need to have the courage to criticize decision made by the owner and the management of [Stellantis] when they are at odds with Italian interests,” Meloni said earlier this year, slamming Stellantis for being registered in the Netherlands and arguing that Italy is systematically penalized in the company’s strategic choices because French shareholders are more influential.
That’s just one of many government attacks on a company that has been at the center of Italian politics and public debate for more than a century. Before turning into a multinational group with factories everywhere in the world, Fiat faced economic ups and downs, regularly receiving generous state subsidies and sparking criticism against its founding shareholder, the influential Agnelli family.
“Stellantis is an ideal enemy for Meloni,” according to Lorenzo Castellani, a political scientist at Luiss University in Rome. “It is a group that somehow decided to move away production despite receiving much financial support. It can easily be accused of poor patriotism,” he said, adding that Meloni is, however, losing the battle against the car giant as Italy has no real way to force Stellantis to make more investments in the country.
Meloni’s government and Stellantis committed to produce 1 million vehicles per year in the country. But both the government and unions say Stellantis is not keeping that promise. Production in Italy dropped by over 25 percent in the first half of this year compared to 2023, according to unions. During the very same period, the company’s net profit also almost halved year-on-year, from €10.9 billion to €5.6 billion.
Since the merger with France’s PSA, the company cut more than 10,000 jobs in Italy, mostly by encouraging older workers to retire. This year, several Stellantis production lines in Italy, including for the production of Fiat 500 and Maserati cars, have been put on hold, with workers receiving a reduced salary under the so-called “cassa integrazione,” a short-term payroll subsidy scheme.
On the top of criticizing Stellantis for the lack of investment in Italy, Rome is now banning the company from showing off its Italian bloodline while producing abroad.
In the spring, Italy’s customs and financial police seized 134 Fiat Topolinos, a new electric city car produced by Stellantis in Morocco, because they displayed an Italian flag sticker which, according to Italian authorities, could mislead buyers on the origin of the car. In June, an Italian judge provisionally ruled that even the name of the model — “Topolino” and “Topolino Dolcevita” — wrongly suggest that the car is made in Italy as they are references to an iconic old Fiat model and to Federico Fellini’s legendary movie.
The tiny, squat light-green cars are still blocked at the port of Livorno, on the Tuscan coast. Since then, Stellantis offered to remove the controversial flag sticker and invited Topolino’s owner to come to Fiat garages to have it removed.
“The law is the same for everyone,” Industry Minister Adolfo Urso said, adding that “fake indications” mislead consumers and are detrimental to Italian companies.
The Topolino affair raises some legal talking points as Stellantis never claimed that the car was built in Italy.
“The simple presence of the Italian flag has been equated with the mention ‘Made in Italy’ and sanctioned even if the company certainly has an Italian origin,” noted Enzo Marasà, a partner at law firm Portolano Cavallo, who is not involved in this particular case.
“It is a particularly strict application of law, probably also a political message, to give a signal to all those companies that move their production abroad, even those Italian companies that should instead, according to the government and a certain popular sentiment, give back to Italy,” the lawyer added.
Earlier this year, Rome banned Stellantis from naming a new Alfa Romeo model produced in Poland as “Milano,” arguing that giving the name of the northern Italian city to a car built abroad would be illegal. Stellantis ended up changing the name to “Junior.”
Like her predecessors, Meloni’s government is trying to convince Stellantis to keep producing in Italy by offering financial support to buyers of low-emission cars. Italy will put up €750 million in 2025 and €1 billion per year as of 2026, Urso announced in August, after a meeting with the auto industry.
But Urso regretted that, despite the government’s financial efforts so far, car production in Italy has not lifted, in part because cars produced out of Italy also benefitted from the purchase bonus. That’s why Urso promised that as of next year only vehicles partially built in Europe will be eligible for the bonus, a measure already adopted in France since the beginning of the year.
These tensions with Stellantis increase the focus on Meloni’s courtship of China.
During her first trip to Beijing at the end of July, Meloni signed several cooperation agreements with China, including on electric cars. Urso recently confirmed that Italy is in talks with several Chinese carmakers to build factories in Italy and, according to Reuters, talks with China’s Dongfeng about a possible Italian factory are at an advanced stage. A delegation of officials from Italy’s industry ministry will travel to Beijing in the second half of August to discuss these files further, according to a ministry spokesperson.
Rome’s charm offensive with Chinese automakers is already irritating Stellantis, with Chief Executive Carlos Tavares warning that opening the door to Chinese carmakers would have “significant social consequences.”
The government could also consider giving Chinese carmakers some historical Italian brands including Autobianchi and Innocenti, currently owned by Stellantis, according to Italian daily Il Sole 24 Ore. The transfer would be possible thanks to a freshly-adopted decree which would allow Italian authorities to take control of iconic brands which have not been used for more than five years. 
“Flirting with other carmakers is not a bad idea,” but Chinese carmakers are unlikely to replace Stellantis for now, warned transport economist Andrea Giuricin, noting that Italy is not an ideal investment destination for carmakers, partly because of high transport costs.
As Castellani, the political scientist, put it: “Meloni can put pressure on Stellantis by banning the use of Italian names and courting Chinese investors to make it jealous. But that can’t be a solution.”
Stellantis did not respond to a request for comment.
CORRECTION: This article has been updated to indicate that Ferrari is an independent company.