Stellantis has reportedly said it will not close plants or implement mass redundancies in Italy.

A report from news agency Reuters cited the remarks of an executive of the company during a government-organised meeting in Rome.

The automaker is navigating industry-wide challenges, including low demand for electric vehicles and competition from China, while dealing with high US inventory levels.

The Italian auto industry is facing declining output and idle plants, with sales of Stellantis' Italian brands, Fiat, Alfa Romeo, and Lancia, decreasing.

Stellantis' challenges include bloated US inventories, which have led to reduced profit and cash-flow forecasts.

The Italian metalworkers federation and Italian workers' trade unions confederation (FIM-CISL) union recently predicted that Italian annual vehicle production would drop to under 500,000 units this year, the lowest since 1958.

A trade union source indicated that Stellantis might pause production at the Mirafiori factory in Turin, where the electric Fiat 500 city car and two Maserati sports cars are produced.

Italy’s Industry Minister Adolfo Urso hosted the meeting in Rome, with industry representatives and trade unions in attendance.

Stellantis Italy human resources manager Giuseppe Manca reportedly said: "Stellantis does not intend to close any plants in Italy, just as it has no intention of making collective redundancies."

During the meeting, Urso announced the government would reconsider plans to cut €4.6bn ($4.86bn) in funds for the automotive industry between 2025 and 2030.

This decision follows criticism from unions and business groups.

Italy's largest trade union, CGIL, stated that Rome intends to restore approximately €200m for 2025.

Gianluca Ficco from the UILM union expressed disappointment, stating that the government had failed to follow up on proposals to relaunch the auto industry that were agreed in previous meetings.

Ficco said: "In practice, the ministry has stopped talks for almost a year, letting the situation plummet."