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23.04.26 09:47:15 Stellantis Picks Four Plants in Europe for Possible China Deals

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(Bloomberg) -- Stellantis NV has identified four factories in Europe it may sell or share as the maker of Peugeots and Citroëns tackles overcapacity, with France’s Rennes site among them, according to people familiar with the situation.

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The manufacturer has started talks with potential partners or buyers, with representatives from China’s Dongfeng Motor Corp. touring the Rennes and Madrid plants earlier this month, said the people, asking not to be identified discussing non-public information.

The visit by Dongfeng, which also included travel to Stellantis sites in Italy and Germany, comes as the two companies discuss reviving a partnership that could include joint car production in Europe and China.

No decision has yet been made on specific plants and the talks could still evolve, with no certainty a deal will happen on any of the sites, the people said.

Previously the pair operated a joint venture in China that ran into trouble. Other Chinese manufacturers are interested in the plants and Stellantis could strike separate deals with multiple players, Bloomberg reported previously. Current talks center around options on sharing the facilities to fill extra capacity, in exchange for access to technology, the people said. A sale of one or more plants could also could take place, they said.

Stellantis said it holds discussions with a range of industry players around the world on various topics, as part of its normal course of business. It declined to comment further.

The company has shared with the French and Italian governments that its surplus manufacturing capacity in Europe amounts to four plants, the people said. These include Rennes, Cassino in central Italy, and Madrid, they said. The Fiat and Jeep maker runs some 20 vehicle assembly sites in the region, where it’s the second-biggest automaker after Volkswagen AG.

President Emmanuel Macron’s press office and the French finance ministry didn’t immediately respond to a request for comment. Italy Prime Minister Giorgia Meloni’s office declined to comment. The industry ministry didn’t immediately respond to a request for comment.

Separately, the group decided to re-purpose at least one plant, with Poissy, near Paris, set to end car production after 2028. The changes will trigger job cuts and impact suppliers such as Lear Corp., Forvia SE and OPMobility. Some labor unions are staging a demonstration on Thursday to protest the decision.

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Any deal with a Chinese entity is set to be scrutinized in France, which faces presidential elections next year. Italy’s government meanwhile has signaled openness to the idea. When pressed about Dongfeng’s possible interest for a Stellantis site such as Cassino, Industry Minister Adolfo Urso this month said Italy would be “open to foreign investors willing to bet on our country.”

Stellantis Chairman John Elkann and Chief Executive Officer Antonio Filosa have been working on solutions for overcapacity in Europe, part of a broad review of operations. Closing plants in the region is politically sensitive and costly across an industry courting reticent buyers with demand still well below levels from before the pandemic. Volkswagen last year walked back plans to shutter several sites in Germany after opposition from worker representatives.

While the slump in output at Italy’s Cassino plant has been under scrutiny for months, Rennes, located in western France, has been hiring workers to make Citroën’s new C5 Aircross.

By selecting plants in different countries, Elkann and Filosa are seeking to spread out the likely impact on local jobs and suppliers, the people said. The group is due to his lay out its new strategy at a capital markets day next month.

--With assistance from Alberto Brambilla and Samy Adghirni.

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