TURIN, Italy, April 10 (Reuters) - Chinese car

manufacturing in Italy could force some tough decisions for

Stellantis ( STLA ) including plant closures, the head of the

Franco-Italian group, Italy's sole major automaker, said on

Wednesday.

The Italian government has said it is talks with Tesla

and Chinese automakers, including Chery Auto, to

attract one of them to manufacture in Italy and increase

national automotive output after years of decline.

"If someone wants to introduce Chinese competition, they

would be responsible for the unpopular decisions that might have

to be taken," Stellantis ( STLA ) CEO Carlos Tavares said at an event in

Turin.

"If we are under pressure, the only one thing we could do is

to accelerate our efforts to increase productivity to be

competitive," he said.

He said Stellantis ( STLA ) would probably lose market share and

sales volumes.

"Then we might not need so many plants as we have now," he

said. "We're ready to battle, but in a battle there are

casualties."

Tavares said speculation that Stellantis ( STLA ) was planning to

divest from Italy was "fake news".

"We're investing heavily in Italy," said Tavares, who in

recent months crossed swords with the Italian government over

the group's production levels in the country.

He announced the automaker would extend the production

of its best-selling Fiat Panda petrol city car to 2030, in a bid

to bring affordability to clients.

The internal combustion engine version of the Panda, which

is produced in Pomigliano d'Arco near Naples, had been scheduled

to be phased out in 2027, while a brand new, electrified version

of the vehicle is expected to be launched later this year.

Tavares was speaking at an event to inaugurate Stellantis' ( STLA )

facility for the production of electrified dual-clutch

transmissions (eDCT) for hybrid and plug-in hybrid electric

vehicles, at the group's Mirafiori complex in Turin.

(Reporting by Giulio Piovaccari, editing by Gianluca Semeraro

and Ros Russell)