Italy’s government reportedly is talking with Chery Auto to attract another major automaker to the country (in addition to Stellantis) and increase national car production, two sources told Reuters.

The news agency said government wants to raise car output to 1.3m vehicles a year from under 800,000 in 2023 and was already in discussion with Stellantis to increase that group’s output to 1m units annually by the end of this decade, a tally last achieved in 2017.

Reuters noted industry minister Adolfo Urso had said Italy wanted a second automaker to add 300,000 vehicles to national output.

If talks succeed, Chery would be among the first Chinese automakers with a European factory.

Urso said recently Italy had talked with Tesla and three undisclosed Chinese carmakers whose representatives visited Italy last year to assess potential investment opportunities.

One of the two Reuters sources said Chery was, for now, the option government was “betting on most”.

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Chery Europe managing director Jochen Tueting told Reuters the automaker expected sales in Europe to be high enough to support a local assembly plant.

“We’re having discussions in several locations across Europe right now,” he added, but non disclosure agreements prevented comment on specific locations.

Reuters’ industry source said Chery was considering either refurbishing an existing plant or building a new one in Italy, but was also assessing other options including a former Nissan plant in Barcelona.

The news agency’s government source said Great Wall Motor was also among the Chinese automakers talking with the government and had visited Italy.

Establishing a factory in Italy or Spain, where EV sales were low compared to other countries, would fit Chery’s strategy of selling a mix of internal combustion engine, hybrid and fully electric cars, Reuters’ industry source noted.