The annus horribilis of the European automotive industry and the Stellantis Plan for 2025

2024 was a “perfect storm” for the automotive sector in Italy and Europe. A sector which, considering the entire supply chain, it is worth 8% of the EU GDP and employs 13 million people in Europe, equal to 7% of the labor market as a whole. The auto manufacturing sector alone employs around 6.6 million.

Plant closures, layoffs, collapse in sales, crisis tables were the negative mantras of historic brands that seemed stainless, including, above all, the German giant Volkswagen which, after a long series of negotiations with the unions, announced the cuts of over 35,000 positions of work in Germany until 2030 and the reduction of the technical capacity of its factories with the aim of saving around 1.5 billion euros per year on labor costs.
The storm also hit, as expected, the global group which in our country is closely linked to the family Lambs: Stellantis, whose president is the much evoked (in recent weeks) John Elkann.

THE NUMBERS
A few figures to help understand the scale of the crisis. In November the car registrations in the overall EU countries extended to EFTA and the United Kingdom they amounted to 1,055,319 units, equal to 2% less on an annual basis, according to data from Anfia and Acea.

In the first eleven months of 2024, registered volumes reached 11,876,655 units, up by just 0.6% compared to the same period of the previous year, but almost 2.7 million less than the 14,542,126 of 2019 (- 18.3%), prior to Covid.

Among the five major markets, UNRAE notes, Italy remained in fourth place both in November and in the first eleven months of the year, and in last place in the rechargeable car market (ECV), with a market share equal to 8.4% overall (5.3% for BEVs and 3.1% for PhEVs). The one paying the price of the crisis is the entire supply chain of the automotive industry. A supply chain that in Italy is made up of over 5,000 companies and employs 272,000 workers, between direct and indirect, equal to 6.8% of those employed in the manufacturing sector, based on Uilm data. The sector represents 5.6% of the national GDP with a annual turnover of approximately 100 billion euros, equal to 11.5% of manufacturing turnover in Italy.

Precisely to defend an industry that employs many people, on October 18th the blue suits took to the streets to ask for guarantees on employment and the relaunch of the automotive industry in Italy, calling Stellantis directly into question. It was since 1994 that Fiom-Cgil, Fim-Cisl and Uilm had not demonstrated together with a united strike in the sector.

THE EU RULES
The causes of the crisis are different. One of these is certainly the competition from China. But the difficulties of the automotive industry are also calling into question what until yesterday seemed to be unshakable principles of green transition pursued by the EU, starting with rules on the decommissioning of internal combustion engines by 2035, legacy of the previous Von der Leyen management.

The “environmental sustainability”, repeat political leaders in Italy and the rest of the continent, cannot ignore “social and economic sustainability”. In fact, it is also weighing on European producers turn towards electric cars desired by the EU: these, at least for now, cost more and, consequently, are sold less.

The rules of Brussels provide for fines exceeding 15 billion euros for manufacturers starting from 2025 if they do not respect certain parameters. In particular, from next year manufacturers will have to face new limits for fleet emissions: the minimum requirement for new cars will drop from 116 g/km of CO2 in 2024 to around 94 grams.
In this way, homes will be forced to significantly increase the weight of electrics to avoid the payment of the relevant sanctions (95 euros for each gram of excess CO2, multiplied by the number of cars marketed).
This vicious cycle is causing automakers to produce less and, therefore, to close sites and lay off workers.

THE ITALIAN NON-PAPER AND GOVERNMENT ACTION
“Madness.” This is how the Minister of Business and Made in Italy Adolfo Urso defined it, who in 2024 actively committed himself to trying to change the rules at EU level, presenting a non-paper on the automotive sector to the Competitiveness Council on 28 November, promoted with the Czech Republic, which was also signed by Austria, Slovakia, Bulgaria, Poland, Malta and Romania and which also received broad convergence from 15 other countries, which “expressed themselves in favor of the proposals contained in the document, based on key principles such as technological neutrality, the need for common resources for the sector and strategic autonomy in the electric battery value chain”.

One of the key points of the strategic document is the anticipation of the revision of the clauses for the stop to internal combustion engines to 2025. The discussion on the Automotive Fund, for which it was initially foreseen in the law, has also taken center stage in recent months in Italy. budget cuts of 4.6 billion over the next few years and on which the government has partially backtracked.

In this year’s budget, the Fund is in fact refinanced with a further 200 million for 2026 and 200 million for 2027 (thus reaching 400 million for each year), in addition to the 200 million for 2025, which remain unchanged. To these we must add the 500 million resources from the Pnrr for the development contracts of the sectors in transition, plus 100 million residuals from 2024.

Overall, it reaches 1.6 billion for the three-year period from 2025 to 2027. In 2025, as explained by Urso, 1.1 billion will be immediately used for development contracts, mini development contracts and innovation agreements.
The other 500 million euros remain untied, waiting to understand how the market is doing, whether refinancing is needed and whether resources need to be directed elsewhere.

STARS
In the eye of the storm, in Italy but not only, the global automotive group which brings together, in addition to Fiat, Jeep, Lancia, Maserati, Opel and Alfa Romeo, also Abarth, Chrysler, Citroen, Dodge, Ds Automobiles, Peugeot, Ram Trucks and Vauxhall.
In our country, Stellantis is currently the only national manufacturer, and therefore the fate of the sector is closely linked to that of the group whose presidency is entrusted to John Elkann.

Such was the storm that induced the group’s CEO Carlos Tavares to anticipate his exit and to submit his resignation last December 1st.
At Mimit, an ad hoc table was set up on Stellantis and the automotive industry which culminated in the meeting on 17 December, when Jean Philippe Learnato, European manager of Stellantis, presented the Recovery plan for Italy to Minister Urso, the trade unions, the trade associations and the representatives of the Regions in which the factories are located. This is a specific production plan for each site which will reach 2032-33 and has the aim of covering 80% of the European market. In the solo 2025 Stellantis plans 2 billion investments in Italy and an increase of 6 billion in purchases from suppliers operating in the country.

“The plan does not provide for public aid: all investments are financed with its own resources”, Learned Learned, reiterating that the group has no intention of closing its production sites in Italy.
Despite this commitment, however, “production in 2025 will be more or less like that of 2024, and therefore it will be a tough, tough year, a year of CIG”, as admitted by Stellantis’ top manager himself during the table at Mimit. The real restart will therefore be in 2026, “with a increase in production by 50%”.

One of the factors of this relaunch will be the launch of the hybrid in the Mirafiori plant, which will remain, asimpresa specified, “the nerve center of the company”. This production choice will lead to “tripling volumes”: “I expect 100,000 more cars a year with the hybrid Fiat at Mirafiori”, said the Europe Stellantis manager.

Among the other points of the strategic plan highlighted by learned, the creation of 3 new models, with a top of the range car, in Cassino starting from 2025, thanks to the new Stla Large platform. The new Stelvio will see the light of day on the Lazio site, followed by the new Giulia. In Atessa, however, a new version of Large Van “specially designed for maximum competitiveness against Asian competition” will start in 2027.

Furthermore, the possibility of building the Giga Factory in Termoli through the Acc joint venture remains open, which Stellantis will support with financing as the main contributor”. In Pomigliano, meanwhile, “the current Pandina will arrive in 2030”, explained the top manager , adding that there will also be another new generation one. Finally, Modena, home of Maserati, will become the high-end hub, involving “the production ecosystem of the Motor Valley” in this mission.

After months in which everyone – politicians, ministers, unions, trade associations – asked John Elkann several times to go and report to Parliament to clarify the group’s intentions for the future, the president of Stellantis finally said yes ‘.
With farewell to CEO Tavares and his strategy, far from both ownership and the ‘pragmatic line’ undertaken by the government in Europe, and the day after the presentation of the strategic plan at Mimit, Elkann made the commitment to go to the hearing in the House in January.

Meanwhile, some unions, including Fiom, have judged the Stellantis plan to be “transitional” and have assured that they will continue the mobilization. 2025 promises to hold some surprises.