Italy’s Car Part Makers See Their Small Size as a Risk in Stellantis Merger -Survey | Investing News

MILAN (Reuters) – Italian car part suppliers see their small average size struggling to adapt to industry changes following the merger of local carmaker Fiat Chrysler with France’s PSA which created Stellantis earlier this year, a lobby survey showed on Thursday.

Global carmakers are investing billions to accelerate a transition to low-emission mobility, pushing parts makers to adapt their production, with electric engines requiring less and often different components from traditional combustion ones.

Most of the Italian parts suppliers surveyed by Italian automotive industry lobby ANFIA did not give a final judgment about consequences of the creation of Stellantis, the world’s fourth largest carmaker.

But it showed a majority of those who responded think their size could put them under pressure from the bigger carmaker 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 car part suppliers like Germany.

“Small size affects their ability to respond to challenges posed by industry changes”.

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 car part 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.

The report showed Italian car parts industry comprised around 2,200 companies, with total revenue of almost 45 billion euros ($52 billion) last year. Around 42% of it came from sales to Stellantis.

(Reporting by Giulio Piovaccari; Editing by Emelia Sithole-Matarise)

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