Italy's Meloni fuels friction with Stellantis over local production

ROME (Reuters) - A car being sold as an "Italian jewel" needs to be made in Italy, Prime Minister Giorgia Meloni said, fuelling friction between the government and Stellantis as they hold difficult talks over a long-term plan for the national auto industry.

Meloni, who heads a centre-right cabinet, also told lawmakers on Wednesday that Fiat-owner Stellantis, the country's sole major automaker, had sometimes made choices which were against the country's interests.

Stellantis, which Meloni described as the product of a de facto French acquisition of Fiat Chrysler, has been in talks with the Italian government since last summer over a plan to raise its annual production in Italy to one million vehicles, from around 750,000 last year.

The carmaker wants support measures, including EV sales incentives.

"If you want to sell a car.... advertising it as an Italian jewel, that car must be made in Italy," Meloni said, adding Stellantis was more focused on France than on Italy in its industrial choices.

A spokesman for Stellantis said the group was strongly committed to Italy.

"The company has invested several billion euros in Italian operations for new products and production sites," he said, adding that over 63% of vehicles produced in the country last year were exported.

Formed through a merger of Fiat Chrysler and France's PSA at the start of 2021, Netherlands-based Stellantis is home to 14 brands, including Alfa Romeo, Peugeot and Jeep. It has the French government among its main investors, with a 6% stake.

The Italian government wants a good relationship with the automaker, Meloni said.

"We want to defend the national interest, establish a balanced relationship with Stellantis".

However, relations with the Agnelli family, the biggest shareholder of Stellantis through holding company Exor, have been strained since Meloni's administration took office in late 2022.

Exor has declined to comment on Meloni's remarks.

The government is expected to launch its new incentive scheme on Feb. 1, worth over 900 million euros ($981 million) for this year.

On Tuesday, Stellantis CEO Carlos Tavares said Italy's penny-pinching approach to purchase incentives had cost the country several months of reduced automotive production.

Tavares, who has made Stellantis one of the most profitable manufacturers in the industry, has said the group must produce value-added vehicles in countries such as Italy and France, while leaving assembly of cheaper cars to low-cost countries.

($1 = 0.9173 euros)

(Reporting by Angelo Amante and Giuseppe Fonte in Rome; additional reporting by Giulio Piovaccari in Milan; Editing by Sharon Singleton and Bernadette Baum)