Officials in Italy have Detroit Big Three automaker Stellantis (STLA) in its crosshairs again, as a new row in regards to whether cars are "truly Italian" has caused a new set of drama amidst long-standing tensions.
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As per a report by Reuters, Italian officials have seized 134 units of the electric Fiat Topolino city car at the port of Livorno, stating that a tiny sticker depicting the colors of the Italian flag stuck onto the car violates an obscure Italian law that bars non-Italian made products from declaring itself as "being Italian."
Within Italy’s Financial Law of 2004 is Article 4, paragraph 49, where it says that exporting or importing “products bearing false and misleading indications of provenance or origin” is considered a crime, as stipulated by Article 517 of the penal code. The Fiat Topolino is made in Stellantis' facility in Morocco alongside its badge-engineered counterpart, the Citroën Ami.
Stellantis has denied any wrongdoing, telling Reuters that it had operated within the full compliance of the rules, stating that the "sole purpose of the sticker was to indicate the entrepreneurial origin of the product," as Fiat is an Italian company and the car was designed at its studio in Turin. Nonetheless, the automaker has agreed to peel off the stickers, as the cars still sit on the port pending the local prosecutor's order.
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The Italian Government vs. Stellantis (again)
Stellantis
The debacle involving the centimeters-thick flag sticker is yet another bar of scrutiny imposed on Stellantis from the Italian government, led by Prime Minister Giorgia Meloni. Such scrutiny lies on some valid criticisms; squarely on the foreign production of cars.
The Fiat Topolino drama occurred very soon after the Italian industry minister lambasted Stellantis-owned Alfa Romeo for naming its car the "Milano," as it was revealed that the compact crossover EV would be made at its facility in Tychy, Poland.
“A car called Milano cannot be produced in Poland. This is forbidden by Italian law,” Urso said, referring to the same law used to seize the 134 Fiats. “This law stipulates that you cannot give indications that mislead consumers. So a car called Milano must be produced in Italy. Otherwise, it gives a misleading indication which is not allowed under Italian law.”
On April 15, Alfa Romeo changed the name of the car to the "Junior."
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These nationalistic views have been shared by Italy's Prime Minister Giorgia Meloni, who has previously blasted Stellantis for making "Italian cars" abroad.
“If you want to sell a car on the international market by advertising it as an Italian jewel, then that car must be produced in Italy," Meloni said in a January speech to lawmakers.
Currently, Stellantis is the largest automaker building cars in Italy, and has asked the Italian government for local subsidies and other support to help boost Italian production. In lieu of this, the automaker has committed to increasing its annual production in the country from 750,000 cars to 1 million cars.
The Italian government itself has high goals for its auto industry, seeking to boost production of vehicles made in the nation from 800,000 in 2023 to 1.3 million per year. In April, reports came out that Italian officials were in early talks with Chinese automaker Dongfeng in possibly setting up shop in the country, a decision that may spell doom for automakers like Stellantis.
Stellantis CEO Carlos Tavares previously warned that introducing Chinese manufacturers into Italy would threaten Stellantis and result in “significant social consequences" that may drive the automaker out of the country.
“We are ready and we are ready to battle, but when there’s a battle you may have casualties,” Tavares said. “Don’t expect to come out of the battle without scars.”
Stellantis, trading under STLA on the NYSE, closed today at $22.09, down 1.12%.
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