China's Dongfeng in pole position to build an auto plant in Italy, report says

ROME -- Talks between the Italian government and China's Dongfeng Motor Group about building an auto plant in Italy are at an advanced stage, Italian sources close to the matter said.

The negotiations are part of efforts to attract another major automaker to the country in addition to Stellantis, the country's sole major automaker whose brands include Fiat and Alfa Romeo.

The Rome government could join Dongfeng with a minority stake in the investment which aims to set up a hub for the whole of Europe, the sources said. The potential deal could also involve other key investors, including Italian companies from the components sector, they added.

Italian Prime Minister Giorgia Meloni's nationalist government wants to raise domestic auto production to 1.3 million vehicles a year, from below 800,000 in 2023.

It has been discussing with Stellantis the possible increase of the group's Italian annual output to one million units by the end of the decade. The automaker last hit the target in 2017.

Italy has been in talks also with other major automakers, including China's Chery Auto, about potential investments in the country.