Stellantis agreed to build 1 million cars in Italy. It’s on a pace for 440,000.
Who Is Stellantis?
Stellantis, a global automotive group formed by the merger of Fiat Chrysler Automobiles (FCA) and Groupe PSA. It encompasses several iconic American automotive brands like Jeep, Chrysler, Dodge, and Ram.
European counterparts include Citroën, Peugeot, Fiat, and Maserati.
Production Slump
Please note the Grim Production Figures from Stellantis.
The Italian Metalworkers union FIM CISL projects that Stellantis will produce around 440,000 vehicles in Italy in 2025. This is less than half the target of one million vehicles by 2030 that Stellantis had agreed upon with the Italian government. This projected annual production of 440,000 vehicles is a further decline from the already low 475,090 vehicles produced in Italy in 2024, which itself marked a 37% decrease from 2023. This situation signals a significant shortfall from the previously agreed upon production goal for Italy.
Italy’s Car Nightmare
Eurointelligence comments on Italy’s Car Nightmare
Car production in Italy is having a terrible time. Stellantis, by far the biggest car producer in the country, is producing volumes that are severely down year-on-year. According to the FIM-CISL trade union, it made 33.6% fewer cars in the first half of 2025 than in the same period in 2024. If you take van production into account, the year-on-year drop is 26.9%.
By the end of the year, the union estimates that Stellantis will have produced 440,000 vehicles a year. If this turns out to be true, it will be well below the 1m vehicle per year target that the firm agreed on with the Italian government.
There are lessons from this entire experience that the Italian government should learn, and other ones that it will probably learn. One is that industrial policy should focus on new technology, and providing incentives for it, rather than dragging the old along. Italy was slow to the mark in getting an incentive scheme together for electric cars. More work could also have taken place, especially at the European level, on the electric car supply chain. China, now the world’s dominant electric carmaker, has been doing this for decades. We are way behind the curve.
But the lesson the government probably will learn is that it is risky to let big businesses fall out of Italian hands. Stellantis came about in 2021, after a merger between Fiat-Chrysler and the French Peugeot. The Italian Fiat, and its founding family, the Agnellis, were the dominant players in the Fiat-Chrysler relationship. Their influence has been diluted in the subsequent merger with Peugeot to create Stellantis.
The Italian government is likely to view it as not coincidental that the big drop-off in car production happened soon after the merger. It has already had various spats with Stellantis, which has tried to placate the government on several occasions. If car production in Italy continues to prove underwhelming, it wouldn’t be surprising to see the government double down on trying to keep the country’s largest firms in Italy.
Obvious Questions
Eurointelligence seldom misses the boat this badly.
Why should government be telling companies how many cars to make?
This has little to do with the merger other than a stupid decision to ramp up EVs that few want.
Rough Four Years
The Street reports Jeep parent Stellantis explores shocking move for struggling brand
Under former CEO Carlos Tavares’ leadership, Stellantis laid off American factory workers, shuffled its C-suite, and forced its U.S. brands to push products that American customers didn’t like.
Stellantis and Tavares separated in December, leaving the conglomerate rudderless for about six months before the company made a late May announcement.
Stellantis is considering the possible sale of its luxury Maserati unit, among other options, Reuters reported.
McKinsey, which is advising Stellantis on the matter, has also said divestment of its only luxury brand is a viable option. Stellantis responded bluntly to the reports: “Respectfully, Maserati is not for sale,” a company spokesperson said.
But low sales in North America was one of the reasons Tavares is no longer head of Stellantis. So is the fact that Maserati saw sales decline by more than half in 2024 to 11,300 units, while posting an operating loss of 260 million euros ($298 million) last year.
The Wall Street Journal reported that Stellantis would idle its minivan plant in Windsor, Canada, for two weeks and shutter its Jeep facility in Toluca, Mexico, for the rest of the month.
Government Meddling Is the Problem
The US under Biden, and the EU nannycrats in general set untenable goals for EVs. Companies ramped up production for cars that few wanted.
The automakers are not profitable or barely profitable without energy tax credits.
Trump put an end to that but created his own distortions. Making cars in the US like he wants is guaranteed to do one thing, and that’s raise prices.
We cannot build cars here as cheaply as we can in Mexico. Consumers, not Mexico will pay the price.
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Other than everything, the auto industry is in fine shape.
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The auto industry is being destroyed by government policy in the West. The Chinese industry is state supported and their push to EV’s is not a market driven strategy but a policy bet. The Chinese are betting that the West will embrace EV’s and they will get further down the learning curve faster than western companies. However, the real issue is that cars have become so expensive to make and fix – which is 100% the result of government regulatory policy. Excessive regulation of internal combustion engines and the addition of driver assistance devices have made cars pricey to build and even more pricey to fix. Said another way, nothing would fix this industry faster than merely rolling the regulatory framework back to say 2000 and leave it there for the next 30 years.
Stellantis’s main problem is its faulty engines, which power a large portion of its vehicles. These are the famous 3-cylinder PureTechs, which initially received “Engine of the Year” awards. Except that one thing couldn’t be tested: reliability. These engines break down after a few tens of thousands of kilometers. The same thing happened to Ford in Europe, with the 3-cylinder EcoBoost. The only reliable cars in my opinion that you can get in France (and probably in Europe too) are the Japanese ones.
Like it or not, the future of the automobile will be EV’s.
European manufacturers are quickly going to be producing EV’s with Solid State batteries:
VW
Porsche
Audi
Bentley
Skoda
Lamborghini
Seat
International
Scania Trucks
Man Trucks
Ducati
Starting model year 2027 we will start to see the introduction of EV’s that are 20-30% lighter with longer ranges and short charging times.
NO way I would buy one of todays EV’s with Solid State being right around the corner.
Te worst thing trump did to our auto manufacturers was stop the charging network from being built out. Trump is an old school gas guzzler kind of guy that has set the U.S. back a decade with his 1950’s mentality
U.S. auto Manufacturers are falling behind quickly and again and I hope our government can get out of their way.
Chrysler and GM should both be long out of business, maybe Ford as well. American cars are lousy quality and overpriced. I remember the 70’s and the pathetic American junk we were forced to buy because of lack of competition. Then came the 80’s with Honda and Toyota. My first Honda sold at a premium over sticker because of the incredible demand for a car that actually worked.
If I recall correctly, Joe Biden told us that electric is the future and shared the stage with Mary Barra who would lead the way with world leader GM.
Joe Who?
Only the Autopen matters.
Taking lessons from British Leyland of the 1970’s
Build a bunch of crap cars with ancient unreliable mechanicals which nobody wants.
Insist to shareholders it’s the general public’s fault for not buying their cars.
Sell whatever is a good brand name off to the Germans.
Cease trading with the government handing out payouts to the directors
You haven’t the slightest idea of the history of the British auto industry post ww2. Certainly crap cars and lousy management, but Leyland was very late to the party and forced in by the government.
Timmy please comeback. Ford and GM were fully committed to ev. O.J Bronco stabbed the jeep. Ram inventory is piling up. The Chinese cannibalized the European car industry. Timmy, save us from this mess.
Autos will be a signal, historical point of failure in US policy we will remember: a milestone. It has everything to do with alternate political regimes, jacked up on centralized power, mutually creating a hash of things.
The US auto manufacturers are screwed. Their R&D, USA-based component manufacturing & assembly labor costs are sky high. Unfortunately, there’s no good solution for these American workers. Moving production to MX will destroy hundreds of thousands of jobs, if not millions once the collaterals are counted.
Good luck Trump, Barra & Farley. You’re going to need a lot of it as well as big bailouts.
Stellantis is not a good example. Most likely car company to go bankrupt, unless overtaken by Jaguar on the finish line.
We know central planning doesn’t work. It cannot stimulate demand where there is none.
China’s central planning seems working.
I think it depend on – –
Leader (democracy change leaders every 4 years or so)
commitments (leaders change policies change )
full support
long term planning
clear future vision
Not to mention betting on the right horse in the race.
Every year there are fewer and fewer people that can afford to buy or lease a new car. Add to that the horrible demographics in Europe (old people who stop driving with hardly any young people to take their place) and this is the kind of result you get.
And the few young Italians that there are would rather spend what money they have on fancy clothes and good food and wine.
I saw more cars on the streets of Europe than ever before this summer. Most of them were unknown Asian brands of cars.There are few Teslas on the road in Europe anymore because they are too expensive. Public transportation is still cheaper.
The consumptive model in the US isn’t sustainable for the next generation. Few realize it but that is what the citizens in the US are fighting over now. It is the past and present vs the future.
Which is a good choice by those young italians!
I will drive my ’98 Corolla until it is just a puddle of rust.
I’ll match that with my 97 Camry, although I own a 2020 Prius for long trips.
My 2020 Lexus is awesome! I love the simple old-school design. It has run like a top for years.
my 2011 outback subaru is the last car I own. I live in Berkeley. My kid will drive it after me, and drive me around as needed. I drive 3k a year. Ha!
A mechanic for 50 years, Scotty Kilmer now runs a YouTube channel with 6 million subscribers to give car advice. He was once asked, “which car do you think is the most reliable?” He nominated the early 2000’s Toyota Corolla as the most reliable car ever produced.
Big Beautiful Inflation from MAKE AMERICA CRAPPY EVERYONE.
MACE.
Don’t look now, but Trump is stupidly throwing gas on the fire regarding the Epstein thing. Musk may really have let the cat out of the bag with his parting remark. Jesse Watters (no ad homs, please) recently posted a related compilation video of the many players on the coverups over the years, including Bill Barr, Bill Burns and Comey’s daughter @ SDNY. Trump should have picked more convincing three stooges than Cash, Bongo and Blondie. Nothing like being blackmailed into a new war and prolonging an existing war, including by one domestic and two foreign intel agencies. .
I have a bridge I can sell you for $1.
Trump clearly wants to play central planner using tariffs. But that could backfire spectacularly, especially for car manufacturing. Historically, US car manufacturing has been pretty god at product innovation (Model Ts, SUVs, EVs) but pretty bad at process innovation. The Trump tariffs would further undermine incentives for process innovation in US car manufacturing, and American-made cars would likely become the joke of the world. Obviously, by then, Trump wouldn’t be around anymore to share the national humiliation.
The Automobile industry in the West is a sun set Industry but a rising one in the Far East . . . the Sun has already set in the West and time is running out for these companies . . . EV vehicles were the dumbest idea in the last 20 years and probably 40 years too early and will be the death of many car companies because they will not be able to compete with the Chinese producers who will more than likely control the world wide automobile industry in less than 15 years if not sooner.
Now that the most unreliable brands in the world are under the same ownership, if Stelantis folded it would make millions of car buyers safer.
AI is really gonna cut a bunch of people off the payrolls. We are now using AI to assist with chip design, verification and test. Eventually it will take a much smaller team of people to do very advanced chips quickly. I think by 2028 there will mass unemployment (> 25 %) which puts the world in a great depression. Governments will be forced to reckon with unemployment on a mass scale.
Chip design has been done by machines for more than 20 years now (probably closer to 30). With billions of transistors on a chip no human could hope to design that. AI may help with it but it’s not replacing massive numbers of human designers because those don’t exist.
This is at the RTL level. Not manufacturing. There are companies out there where you just feed it requirements and they have tools that will auto generate the RTL. I’m talking about front end design and verification of code that humans still write. AI will be way better, faster and cheaper like everything else. Humans are screwed once AI learns how to create AI to do anything. AI will do the things that humans want to do and make humans do the things that AI can’t like clean your house or mow your yard. Life is gonna look very different by 2030.
This has been going on for a LONG time, a lot longer than AI has been around. Better software that automates more things has always been the goal of software development (I’ve been in this industry since the late 80s).
Over that time countless positions (software and other industries) have been eliminated by software advances. So a few more are going to be eliminated. But are there hundreds of thousands working doing RTL or only a few hundred specialized people? My guess is a few hundred specialized people.
It will take some realization and time. Specialized people are also being asked to use AI. The dirty little secret in the tech mgmt world is the number of layoffs that are coming. Also, I think it is wrong to compare AI to previous revolutions which still required many humans. This one will require way less humans.
AI is not going to destroy the human beings by itself.
Its human. Human will destroy human beings.
Human are the most greedy and cruel creature in the world.
Don’t blame on AI.
Gardening is reported to be the profession with the highest job satisfaction rating, so maybe A.I. will be doing us a favor….
War is the preferred way to get rid of excess labor.
Disease and lack of health infrastructure also works. The wealthy will use AI to improve their health and leave everyone else behind.
Especially yours.
The auto industry serves as a bellwether for the overall health of the economy.
This was definitely true in the 1970s and earlier. That’s why Detroit was one of the most important cities in America.
But it hasn’t been true for a long time now. Tech (along with finance) is the bellwether for the overall health of the economy. At best, the auto industry is the bellwether for manufacturing.
My job is barely analog anymore, and that only because I asked for that, to get out of the house and in front of people once a week.
How is Jaguar doing?
unless there is a 180 turn around it won’t survive the next 10 years.
Go woke, go broke. Some of their line-up is hideous. Unless British, I think most upscale buyers would be looking at BMW / Mercedes.