Stellantis’ €2B Plan to Revive Italy’s Car Industry

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In 2024, Italy’s car industry endured its worst performance in decades. Stellantis, the conglomerate behind household names like Fiat, Maserati, and Alfa Romeo, recorded a 37% drop in vehicle production, with passenger car output plummeting 46% to its lowest level since 1956.

This collapse reflected more than just company-specific troubles: it signaled a wider crisis confronting the Italian and European automotive sectors.

Now, with a bold investment of €2 billion earmarked for 2025, Stellantis is launching an ambitious plan to reverse the trend and reestablish Italy’s place at the heart of European car manufacturing.

1. Why Italy’s Car Industry Is at a Crossroads

Once a proud pillar of national economic identity, Italy’s car industry contributes over 5% to the country’s GDP and sustains more than 270,000 jobs. Yet the sector is under siege. Demand for electric vehicles (EVs) is growing slower than forecasted.

EU environmental regulations are tightening. And foreign competition—especially from Chinese EV manufacturers—is escalating. The dramatic decline in Stellantis’ 2024 output came as no surprise to analysts. The Fiat 500e, once a poster child for Italy’s EV push, saw its sales crater from 65,000 units in 2023 to an estimated 20,000 the following year.

At Mirafiori in Turin, production slumped 70%, while Maserati’s Modena plant dropped 79%. Even historically stable sites like Pomigliano d’Arco and Atessa posted notable declines.

2. Stellantis’ €2B Investment: A Strategic Reset

To halt this decline and future-proof its operations, Stellantis is deploying a €2 billion investment in 2025 as part of a broader €10 billion commitment from 2021 to 2025. An additional €6 billion will reinforce the Italian supply chain. Unlike past plans, this strategy includes no public subsidies and is tightly aligned with Stellantis’ long-term vision.

Highlights of the investment plan:

• All six Italian plants will remain operational until 2032
• New models will be launched across multiple platforms and powertrains
• Turin will serve as Stellantis’ European headquarters beginning in 2025

3. Model Pipeline and Plant Revitalization

Each plant will serve a strategic function in Stellantis’ recovery:

i) Pomigliano d’Arco: Launching the Fiat Pandina and compact EVs on the STLA Small platform from 2028. Current Panda production continues until 2030.

ii) Melfi: Expected to triple output with Jeep Compass, DS7, and Lancia Gamma starting in 2025. A new DS8 model is planned with advanced battery tech.

iii) Cassino: Set to produce hybrid and electric Alfa Romeo Stelvio and Giulia models, alongside a top-tier luxury vehicle by 2026.

iv) Mirafiori: Will host hybrid Fiat 500 production and ramp up dual-clutch transmission (eDCT) output from 600,000 to 900,000 units annually.

v) Atessa: Began producing large EV vans in late 2024, with an enhanced lineup scheduled for 2027.

vi) Termoli: Explored for a gigafactory conversion but remains under review.

vii) Modena: Designated as Maserati’s high-end development hub.

4. Support from the Italian Government

The Italian government is supplementing Stellantis’ efforts with a €1.6 billion investment, of which €1 billion is available in 2025. Unlike previous years, the funds are earmarked not for consumer incentives but for supply chain reinforcement.

The goal: help local suppliers adapt to electrification and ensure continuity of jobs across Italy’s car industry.

5. Strategic Significance of Turin

Turin will assume a new role as Stellantis’ European headquarters from January 2025. While the company maintains its fiscal base in the Netherlands, this move restores symbolic and operational centrality to the Italian auto sector. It also reinforces Fiat’s historical roots while aligning with EU policy engagement and R&D needs.

6. Obstacles on the Road Ahead

Stellantis’ roadmap comes with major challenges:

• EU Regulations: As of January 2025, 20% of all vehicles produced must be electric. Non-compliance could result in heavy fines.

• Leadership Changes: The resignation of CEO Carlos Tavares in late 2024 has placed Chairman John Elkann in temporary charge, creating a transition period amid market uncertainty.

• Foreign Competition: Chinese automakers now control 25% of Europe’s EV market. While the EU has imposed up to 35.3% in tariffs, Italy continues to push for balanced trade solutions.

7. Employment and Economic Outlook

Italy’s car industry is not just about products—it’s about people. Stellantis has pledged to keep all factories open through 2032, aiming to stabilize employment and avoid mass layoffs like those seen in 2024.

Interim management, such as that provided by CE Interim, is playing a behind-the-scenes role in helping manufacturers and suppliers navigate plant ramp-ups, labor challenges, and operational pivots.

8. Sustainability and Innovation Goals

Stellantis aims for carbon neutrality by 2038. The new investments target energy-efficient production and expanded EV lineups. Projects like Biella’s electric motor component plant, and potential battery gigafactories, align with EU climate objectives—but only if infrastructure and consumer demand catch up.

9. Early Signals and Market Response

As of Q1 2025, Stellantis reported a modest 1.9% increase in EU30 market share (to 17.3%), led by models like the Citroën ëC3 and Fiat Grande Panda. While early, it suggests that the strategy may be gaining traction.

10. Looking Forward

• Short-Term: 2025 will test Stellantis’ ability to scale EV production while complying with evolving EU rules.
• Mid-Term: From 2026 onward, over a dozen new models are expected to revitalize volumes.
• Long-Term: If investment and policy stay aligned, Italy’s car industry may not just recover—it could evolve into a sustainable, globally competitive hub.

Conclusion

Stellantis’ €2 billion plan is more than a financial commitment—it’s a strategic pivot for Italy’s car industry.

With government backing, interim expertise from firms like CE Interim, and a new generation of hybrid and electric models, Italy may yet write its next industrial comeback story. The road is uncertain, but the foundation has been laid.