Italian firm DR Automobiles has been fined EUR6m (US$6.4m) for allegedly branding Chinese origin cars as Italian made, according to the country’s antitrust authority (AGCM).

The BBC reported the company said it would appeal against the fine as it had never claimed its vehicles were completely made in Italy.

DR Automobiles, based in the south of Italy, mainly sells low cost rebadged vehicles using parts from Chinese automakers BAIC, Chery Automobile and JAC Motors

According to the regulator, the company’s DR and EVO brands were being sold as Italian made but were largely of Chinese origin with only minor assembly and finishing work being carried out in Italy.

Founder Massimo Di Risio said: "We fully dispute the AGCM's decision and are about to challenge it, confident of overturning it entirely.”

DR Automobiles and its spare parts unit were given 60 days to communicate the steps taken to rectify the issues identified by AGCM, Reuters reported.

The fine came amid tensions between China and the EU, after the EU recently announced proposed import taxes on Chinese EVs of up to 38%, targeting auto giants such as BYD and Geely.