This measure is intended to ensure that the vehicles produced in the new plant adhere to Western security standards, particularly given the growing concerns about data protection and cybersecurity in the automotive industry. Additionally, Italian officials are pushing for consumer data collected by Dongfeng’s vehicles to be stored and managed within Italy. This stipulation aims to prevent the transfer of sensitive data outside of the country, addressing the broader concerns that have arisen with the increasing integration of digital technologies in automobiles.
The Italian government’s approach reflects its dual objectives: capturing the economic benefits of Chinese investment in the auto sector, which has been in decline for decades, while simultaneously mitigating the risks associated with cybersecurity and data protection.
Prime Minister Meloni, who recently met with Chinese President Xi Jinping in Beijing, is navigating a complex landscape of renewing trade ties with China while ensuring that national security is not compromised.
Stefano Aversa, chairman for Europe, the Middle East, and Africa at consultancy firm AlixPartners, highlighted the potential benefits of Dongfeng’s entry into the Italian market. He noted that while the arrival of a Chinese carmaker could revitalize Italy’s stagnant auto market, it is crucial that local suppliers play a central role in the supply chain to ensure compliance with Western security standards, especially for next-generation vehicles.
As part of a broader strategy to promote Italian automotive suppliers, the government has urged Dongfeng to source at least 45% of the components for each car from within Italy. Meeting this requirement would qualify Dongfeng for several hundred million euros in public incentives. These incentives are designed to boost domestic production and help the country achieve its goal of producing 1 million vehicles annually by 2030. In 2023, Italy’s auto production stood at 880,000 vehicles, down from 1.14 million in 2017 and 1.74 million in 2000, reflecting a long-term decline in the industry.
The Italian government’s efforts to attract Dongfeng come as part of a broader push to revive the country’s automotive sector. This initiative gains urgency as Stellantis NV, the dominant player in the Italian market, has signaled its intention to potentially move some production to lower-cost locations.
Stellantis, which has an automotive partnership with Dongfeng in China, sold assets to the Chinese company last year, further complicating the dynamics between the two companies.
In addition to Dongfeng, Italy has also engaged in discussions with other Chinese manufacturers looking to expand in Europe, particularly as they seek to circumvent new tariffs on electric vehicles. Attracting Dongfeng to Italy would not only secure a major investment in the country’s automotive sector but also position Italy as a significant player in Europe’s efforts to accelerate electric vehicle (EV) manufacturing. Moreover, it would help rebuild Italy’s partnership with China following the country’s decision to exit Xi Jinping’s Belt and Road Initiative.
As negotiations continue, the Italian government remains committed to balancing the benefits of foreign investment with the need to protect national security and bolster its domestic automotive industry.
