Last fall, Italy's industrial heritage suffered another devastating blow: the Indian company Tata bought IVECO. Our government stammered a few polite words, and the buyer promised to maintain its production commitments here for two years, but everyone knows that Tata bought Iveco to eliminate a competitor (just as ArcelorMittal bought Ilva to shut it down). Giorgio Garuzzo, a former Fiat executive and former CEO of the truck group, made this clear with full knowledge of the facts.
Another former Fiat executive is Alfredo Altavilla, who is now a key European consultant for the Chinese group BYD, now the world's largest electric car manufacturer (4.6 million in 2025). Last spring, Altavilla began a selection process among Turin's historic automotive suppliers, meeting with 200 leading companies in the brakes, transmissions, and transmission systems sectors on behalf of BYD. It ultimately selected 85 for their reliability. BYD has opened a plant in Hungary to produce 250,000 cars a year and intends to open another in Turkey. It has already opened its Design Center in Milan.
Is the future Chinese, even for those who produce automotive components in Italy? Everything suggests so, but let's take a step back before getting too far ahead.
In Italy, there are approximately 2,000 companies in the sector, with a combined turnover of EUR60 billion. They have been struggling for some time to cope with the situation, which sees the automotive sector in serious difficulty throughout Europe, and particularly in Italy. Here, the situation has become increasingly dire in recent years.
In Europe, sales grew by 2.4% in 2025, exceeding 13 million units. Compared to 2019, however, we are still 16% down. The situation is even more dire for Italy, which saw a 20.5% decline compared to the pre-pandemic period: a dismal result, second only to France, where the decline exceeded 26%. These are significant numbers for Stellantis, which combined FCA, Peugeot, Citroën, and Opel, and therefore has the Italy-France-Germany triad as its main outlet markets. Indeed, while other markets are growing, Stellantis is reporting a 3.9% sales decline in 2025: if there are no sales, there is no point in producing, and indeed, the production and employment figures are alarming.
In 2025, only 380,000 vehicles were produced in Italy. Of these, 214,000 were cars (-24%) and 166,000 were commercial vehicles (-13%). We've gone back 70 years.
If we examine the Stellantis production data summary, we immediately notice the prolonged agony of the Group's plants: from 2017 to today, total vehicle production has dropped from over one million to less than 400,000 per year. Among these, cars have dropped by over 500,000 units. The two plants in Cassino and Melfi have seen a steep drop in production, which has worsened over the past year. Only the Turin production hub (Mirafiori) has recorded a positive balance. More than half of the Group's workers are involved in rotational social safety net mechanisms (solidarity contracts and redundancy payments). The new industrial plan is slow in arriving, and after Tavares's ouster at the end of 2024, the new company boss, Antonio Filosa, doesn't seem particularly enthusiastic about reviving strategic investments.
Starting, for example, with the Gigafactory for electric car batteries, which had been promised for Termoli and could have provided a guarantee for the 1,800 workers at that plant. Or the new models that were about to be delivered to Cassino (Alfa Romeo Giulia and Stelvio) but have been postponed. After the Jeep Compass, Renegade, and Fiat 500X were discontinued, Melfi will have to wait until 2028 to see two new models launch. Meanwhile, the number of employees has fallen by more than 2,500 since 2021, thanks to incentivized resignations, leaving just over 4,500 workers at the factory.
Pomigliano has so far held up production of the old "Pandina", which with its 112,690 units represented practically 53% of Stellantis' domestic car production in 2025. Production is confirmed until 2030, but the drop was still 21% and its role could be compromised by competition from the "Pandona", which is instead produced in Serbia.
All European manufacturers, however, are united in blaming the European Union's "Taliban" regulations on polluting emissions as the culprit for this widespread crisis. Uncertainty regarding the timing of the energy transition has certainly slowed the replacement process, so much so that today less than 20% of the European car fleet is electric (in Italy only 6.2%!). Obviously, there would be a long discussion to be had about the delay in research and investment in this sector, both by the public and private sectors. And this is not just in Italy: Marchionne didn't believe in electric cars, but the Germans also procrastinated too much.
While in China the state has created the conditions for organic development of electric vehicles (from battery production to their disposal) with enormous public investments, in Europe the preference has been to introduce draconian but unenforceable measures, while at the same time providing incentives to (wealthy) consumers to lower the final price of extremely expensive models, beyond the reach of the average consumer. Thus, the market is failing to take off and is turning to high-end models, perhaps produced elsewhere, like Tesla and BYD, while domestic car manufacturers risk going under within a few years.
To address the lobby's complaints, which include industrialists as well as trade unions, the European Union recently changed its stance, offering a glimmer of hope for traditional production even after 2035. The EU Commission has revised the emissions regulation, allowing car manufacturers to reduce tailpipe CO2 emissions by 90% from 2021 levels starting in 2035, rather than the 100% required by current legislation.
This revision also opens the post-2035 market to the sale of vehicles with internal combustion engines, plug-in hybrids, etc., and no longer exclusively to electric or hydrogen vehicles. The remaining 10% of emissions will have to be offset through "credit" mechanisms, which companies can accumulate, for example, by using low-emission steel "made in Europe" in vehicle production, or by using sustainable fuels, such as e-fuels and advanced biofuels.
This is a small measure that won't solve the situation, but it can provide some breathing space for manufacturers, perhaps along with a tariff system that protects them from foreign competition, particularly from China. This would in itself have the power to quickly wipe out a historically innovative industrial player, one that still holds significant weight in a manufacturing economy like Germany's, and beyond.
Volkswagen remains the world's second-largest vehicle manufacturer, behind Toyota, but lost EUR48 billion in market capitalization in 2025 and fell to third place in its key market (China), overtaken by BYD and Geely.
China, a country that produced nearly 35 million vehicles in 2025 (absorbing 27 million), at least according to statistics released by internal sources: proof of its now undisputed dominance in electric car technology, with dozens of companies and significant production volumes.
For decades now, the sector has been periodically confronted with cyclical crises, which seemed obsolete and outdated. However, the last 20 years have seen a new innovative vitality, driven by electronic technology and the electric version of automotive.
The inability to conceive and design alternative mobility systems to private individual transportation has emerged: even when this occurred, it hasn't achieved sufficient industrial impact to radically change the transportation system and city life.
We've seen the explosion of low-cost air travel, we've inaugurated many high-speed train lines, we've seen cities populated by bicycles and scooters: but the car isn't dead, and the ratio of vehicles in circulation to inhabitants continues to rise.
At the end of offshoring, will we end up skimping on some survival space in the system of supplying components to Chinese factories?
We may have answers to this question in the next decade...
Renato Strumia
https://umanitanova.org/motore-in-folle-settore-auto-tra-crisi-verticale-e-cambiamento-radicale/
_________________________________________
Link: (en) Italy, FAI, Umanita Nova #4-26 - Engine in neutral. Auto sector: between vertical crisis and radical change (ca, de, it, pt, tr)[machine translation]
Source: A-infos-en@ainfos.ca
Geen opmerkingen:
Een reactie posten