In response to overcapacity challenges in the European market, Stellantis NV is accelerating its strategic adjustments and is considering selling or sharing some of its plants by bringing in partners. Negotiations have now entered a substantive phase.
According to a Bloomberg report on April 23, insiders revealed that Stellantis has identified four plants in Europe as potential candidates for sale or sharing and has already engaged with multiple potential partners. Earlier this month, representatives from Dongfeng Group visited facilities in Rennes, France, and Madrid, Spain, and also inspected related Stellantis operations in Italy and Germany. This move indicates progress in discussions to restart their partnership, with potential collaboration possibly including joint vehicle production in Europe and China.
Sources noted that the talks are still in early stages, with specific plants yet to be finalized and outcomes still uncertain. Besides Dongfeng Group, other Chinese automakers have also expressed interest in the facilities, and Stellantis may reach separate agreements with multiple parties.
Four plants have been shortlisted for evaluation. According to Bloomberg, Stellantis has informed the French and Italian governments that its excess capacity in Europe is equivalent to the output of four factories. Insiders indicated that the plants under consideration include facilities in Rennes, France; Cassino in central Italy; and Madrid, Spain, with a fourth location yet to be disclosed.
Stellantis operates approximately 20 vehicle assembly plants across Europe, making it the continent's second-largest automaker after Volkswagen. The core proposal under discussion involves sharing production capacity in exchange for technology access, while the sale of one or more plants is also being considered.
The operational status of each plant varies significantly. The Cassino plant in Italy has faced persistent low utilization and has been under scrutiny for months. In contrast, the Rennes plant in France is currently expanding its workforce due to strong demand for the new Citroën C5 Aircross. Stellantis Chairman John Elkann and CEO Antonio Filosa have chosen a multinational selection of candidate plants, reportedly to mitigate potential impacts on local employment and suppliers.
Dongfeng Group has resumed partnership discussions with Stellantis. The two companies previously operated a joint venture in China, which eventually encountered difficulties. The recent visit by Dongfeng representatives to multiple European plants signals a tangible warming of cooperation intentions.
Stellantis stated that it maintains regular communication with industry participants worldwide on various topics but declined to comment further on specific details.
The Italian government has signaled relative openness to foreign investment. When asked about Dongfeng's potential interest in the Cassino plant, Industry Minister Adolfo Urso stated this month that Italy is open to foreign investors willing to bet on the country.
Bernard Jullien, an economics researcher at the University of Bordeaux, expressed caution. He noted that selling some plants to Chinese manufacturers holds strong appeal for Stellantis management and is welcomed by politicians, although the latter may mistakenly believe it will preserve jobs. However, the impact on suppliers also warrants attention.
As these negotiations proceed, Stellantis has already made separate arrangements for certain plants. The Poissy facility near Paris will cease vehicle production after 2028, a move expected to result in job cuts and affect suppliers such as Lear Corp, Forvia SE, and OPMobility. On Thursday, multiple labor unions held simultaneous protests at several Stellantis plants.
In Italy, the Fiom union has called for a meeting with the government ahead of Stellantis' Capital Markets Day scheduled for May 21, to discuss plant retention and job security. Stellantis Chairman John Elkann and CEO Antonio Filosa are expected to formally announce the company's new strategy during the event.
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