What's Happening?
Stellantis, the automotive giant formed from the merger of PSA Group and Fiat Chrysler Automobiles, has reported a significant decline in its Italian passenger car production. In 2025, the company's output
fell by over 20%, marking the lowest production level since 1955. The FIM-CISL trade union revealed that Stellantis produced 379,706 vehicles in Italy last year, with the passenger car segment experiencing a 24.5% year-on-year decline to 213,706 units. This downturn is attributed to several factors, including production suspensions exceeding 100 days at various plants and reduced working hours for nearly half of the workforce. The Mirafiori plant in Turin was the only site to see an increase in output, driven by the new Fiat 500 hybrid model. The Italian government has previously criticized Stellantis for relocating production to countries with lower labor costs.
Why It's Important?
The decline in Stellantis' production is a significant indicator of the challenges facing the Italian automotive industry. This downturn not only affects the company's operations but also has broader implications for Italy's economy, which relies heavily on automotive manufacturing. The reduction in production could lead to job losses and economic instability in regions dependent on the automotive sector. Additionally, the shift of production to countries with lower labor costs highlights the competitive pressures in the global automotive market. Stellantis' commitment to increasing investment in Italian facilities may offer some hope for recovery, but the industry's future remains uncertain.
What's Next?
Looking ahead, Stellantis plans to boost production of the Fiat 500 hybrid and launch the new Jeep Compass in southern Italy, which could help stabilize the company's output. The union anticipates a modest recovery in 2026, contingent on these new models' success. However, the company must navigate ongoing economic challenges and potential political pressures to maintain its Italian operations. The Italian government and labor unions will likely continue to monitor Stellantis' actions closely, advocating for policies that support domestic manufacturing and employment.
