Italy's DR Automobiles fined for misleading over Chinese-origin cars

Italian automaker DR Automobiles has been hit with a substantial fine of 6 million euros (approximately USD 6.4 million) by Italy's Antitrust Authority (AGCM) for misleading consumers about the origin of its DR and EVO car models. The company, based in the southern Italian region of Molise, assembles low-cost vehicles, including electric models, using components imported from Chinese manufacturers Chery, JAC, and BAIC.

The AGCM found that DR Automobiles marketed its DR and EVO brand cars as "made in Italy" products, when in fact, they are predominantly manufactured in China. The company's role in Italy is limited to minor finishing touches and assembly operations.

In response to the ruling, DR Automobiles has announced its intention to appeal the decision. The company's founder, Massimo Di Risio, expressed disbelief at the ruling, stating that they had never claimed their cars were entirely manufactured in Italy. Di Risio affirmed their commitment to challenging the decision, expressing confidence in overturning it completely.

Despite the controversy, DR Automobiles has revealed plans to expand its operations at its Macchia d'Isernia facility in Italy. The company aims to develop a new production plant to aid in the creation of new models.

This case is part of a broader trend in Italy, where authorities have been taking a firm stance on country-of-origin issues in the automotive sector. For instance, Stellantis recently removed the Italian flag from the rear bumpers of its Polish-produced Fiat 600 after facing accusations of misleading consumers about the vehicle's origin.

The fine imposed on DR Automobiles also addressed issues with its spare parts and after-sales service. The AGCM found that the company's DR Service & Parts unit failed to provide an adequate supply of spare parts and satisfactory after-sales service, potentially infringing on consumer rights.

In response to these concerns, DR Automobiles reported improvements in its spare parts delivery times, citing an average of just over two days in the first quarter of 2024. The company and its spare parts unit have been given 60 days to communicate the steps they will take to address the issues identified by the authority.

This case unfolds against the backdrop of rising tensions between China and the European Union over car imports. The EU is considering implementing tariffs to protect its domestic production from what it perceives as unfair Chinese competition in the electric vehicle market.