Stellantis strategic overhaul: Plans to sell or share four factories in Europe, reports suggest Dongfeng Motor may become a potential buyer.

To resolve the issue of overcapacity in the European market, Stellantis is accelerating its strategic adjustments and considering selling or sharing some factories by introducing partners; related negotiations have entered a substantive stage.

According to a Bloomberg report on April 23, insiders revealed that Stellantis has identified four factories in Europe as potential targets for sale or sharing and has initiated contact with multiple potential partners. Earlier this month, representatives from Dongfeng Motor visited Stellantis’ factories in Rennes, France, and Madrid, Spain for on-site inspection, with additional tours including Stellantis facilities in Italy and Germany. This move marks progress in discussions to restart the partnership, with potential cooperation including joint vehicle production in Europe and China.

Sources say the negotiations are still at an early stage, and specific factories have not been finalized, with developments remaining uncertain. Besides Dongfeng Motor, other Chinese vehicle companies have also expressed interest in the relevant factories, and Stellantis may reach agreements with multiple parties.

Four factories included in candidate list

According to Bloomberg, Stellantis has disclosed to the French and Italian governments that its excess capacity in Europe is equivalent to the capacity of four factories. Insiders reveal that the candidate factories include Rennes in France, Cassino in central Italy, and Madrid in Spain, while the fourth factory remains undisclosed.

Stellantis operates about 20 vehicle assembly plants in Europe and is the second-largest automaker in Europe after Volkswagen. The core plan under discussion is to exchange shared capacity for access to technology, with the sale of one or more factories also being considered.

The operating conditions of each factory differ significantly. The Cassino factory in Italy has seen consistently low capacity, attracting attention for months; in contrast, the Rennes factory in France has recently been expanding its workforce due to strong demand for the new Citroën C5 Aircross. Stellantis Chairman John Elkann and CEO Antonio Filosa have chosen to diversify candidate factories across countries, with insiders stating this is intended to mitigate the potential impact on employment and suppliers in various locations.

Dongfeng Motor restarts partnership negotiations

Dongfeng Motor and Stellantis previously operated a joint venture in China but eventually faced difficulties. This time, with Dongfeng representatives personally visiting several factories in Europe, the intent to cooperate is rising substantially.

Stellantis said the company maintains daily communication with industry participants globally on various topics but declined to comment further on specifics.

The Italian government has sent relatively open signals. Minister of Industry Adolfo Urso commented this month, when asked about Dongfeng’s potential interest in the Cassino factory, that Italy is “open to foreign investors willing to bet on the country.”

Bernard Jullien, an economics researcher at Bordeaux University, takes a cautious stance. He pointed out that selling some factories to Chinese manufacturers has strong appeal to Stellantis management and is welcomed by political figures, although the latter mistakenly believe this will preserve jobs. However, the impact on suppliers also warrants attention.

Factory reorganization affects supply chain and employment

Meanwhile, Stellantis has made separate arrangements for some factories amid the ongoing negotiations. The Poissy plant near Paris will cease vehicle production after 2028, triggering layoffs and affecting suppliers such as Lear Corp, Forvia SE, and OPMobility. On Thursday, multiple labor unions staged simultaneous protests at several Stellantis factories.

Italy’s Fiom union has called for a meeting with the government ahead of Stellantis’ capital markets day on May 21 to discuss factory retention and employment protection. Chairman John Elkann and CEO Antonio Filosa are expected to officially announce the company’s new strategy on that capital markets day.

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