Will Dongfeng finally open a factory in Italy?
- Following Italy's vote in favour of an additional tax on battery electric vehicles imported from China, the Chinese carmaker Dongfeng, which had planned to build an assembly plant in Italy to produce its own models, according to an agreement signed in early August 2024 with the Italian government, has just announced that it is reconsidering this project, probably due the slower than expected development of the electric vehicle market in Europe but perhaps also following Italy's vote in favour of the European Union's additional tax system.
- If this project is cancelled, it would be damaging for the Italian automobile industry, which needs to revive production on its soil. Several hundred thousand vehicles could be produced locally, in addition to the 800,000 produced annually today (mainly by Stellantis).
- Given that Chinese vehicles produced in Europe are not subject to the additional taxes, this decision appears to be an additional weight in favour of the Chinese in the balance of negotiations between the European Union and China.
- The possible questioning of this factory could allow Dongfeng to consider another more accommodating European country, such as Germany, Hungary, the Czech Republic or Slovakia, these countries having voted against the additional taxes proposed by the European Union. At the same time, Dongfeng's position is part of a context in which the Chinese government has more generally asked to reconsider the positions of Chinese carmaker s and European governments on new projects. It is still unknown whether this directive could affect projects already well advanced such as BYD in Hungary, Chery in Spain or even Leapmotor in Poland.