MILAN -- Italian suppliers see their small size as a disadvantage in the struggle to adapt to industry changes following the merger of Fiat Chrysler Automobiles and PSA Group, which created Stellantis, a survey showed.
The Italian car parts industry comprises about 2,200 companies, with total revenue of almost 45 billion euros ($52 billion) last year. Around 42 percent of it came from sales to Stellantis.
Most of the suppliers surveyed by Italian auto industry lobby ANFIA believe their size could put them under pressure from the automaker to adapt to its demands.
"There is a problem with size and this is an issue, especially in terms of investments, when businesses need to refocus their productions," said Marco Stella, head of the components sector at ANFIA, noting that Italy did not have large suppliers like Germany.
"Small size affects their ability to respond to challenges posed by industry changes," Stella said.
However, many of the respondents in the survey still saw the merger as an opportunity, in particular for wider access to markets the group can guarantee, the report said.
Francesco Zirpoli of Venice Ca' Foscari University, who contributed to the report, said the fortunes of Italy's suppliers would be tightly linked to how Stellantis manages the overlap between its former Fiat Chrysler and PSA European supply chains.
"Italian car-parts makers are struggling to update their offer through R&D investments," he said.
Global automakers are investing billions to accelerate a transition to low-emissions mobility, pushing parts makers to adapt their production, with electric motors requiring less parts and different components from traditional combustion engines.