TURIN (Reuters) -Stellantis ( STLA ) Chairman John Elkann on Tuesday warned that the European auto industry risks an "irreversible decline".

Speaking in Turin during an event marking the start of large-scale production of the new hybrid version of the Fiat 500 small car, Elkann said the industry as a whole had drawn up a package of proposals for the European Commission to give automakers more flexibility on emissions targets and that this would allow the sector to avoid such decline.   

The European Commission is due to present on December 10 a package of proposals as part of its scheduled review of EU carbon emissions regulation for the auto industry.

Elkann earlier this month said Stellantis ( STLA ) backed a string of measures put to the EU to support the European auto industry.

Those proposals include allowing plug-in hybrids, range extenders and alternative fuels beyond 2035, averaging interim carbon reduction goals fixed for 2030 over several years, introducing a wide scrappage scheme on existing cars and adapting regulation to favour the production of small cars.

Gianluca Ficco of UILM union said in a statement that the start of production of the hybrid Fiat 500 was positive for Italian output but added that the EU needs to change rules for the auto industry, "before it's too late" and to avoid tough consequences for the industry and jobs.