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Stellantis ( STLA ) investing 2 billion euros in Italy this year

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New Stellantis ( STLA ) CEO to be announced in first half

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League party attacks group for electric vehicle focus

(Recasts to lead on Elkann's comments on automotive-defence

conversion)

By Giulio Piovaccari and Angelo Amante

ROME, March 19 (Reuters) - The chairman of Stellantis ( STLA )

said on Wednesday that Europe's automotive industry

does not need to convert to defence production, while confirming

the group is on course to appoint a new CEO in the first half of

this year.

As European counties discuss a big increase in defence

spending, Italy's Industry Minister Adolfo Urso said this week

that Rome was preparing an industrial plan aimed at fostering

connections between its automotive, defence and aerospace

sectors, to be unveiled in June.

Addressing the Italian parliament, Stellantis ( STLA ) Chairman John

Elkann said U.S. and China both maintained strong defence and

automotive industries, meaning there was not a choice to be made

between the two.

"We don't think the future of the car is the defence

industry," said Elkann, whose multinational group includes

brands such as Fiat, Jeep and Peugeot.

Elkann -- who has been steering Stellantis ( STLA ) since former

CEO Carlos Tavares suddenly left in December following a shock

profit warning and divergences with the board -- confirmed the

succession process was going ahead to the planned timetable.

"The new CEO will be announced within the first half of the

year," he told lawmakers.

Elkann is part of the Agnelli family that founded Fiat and

is Stellantis ( STLA ) largest shareholder through its investment company

EXOR.

Elkann on Wednesday also confirmed Stellantis ( STLA ) was investing

2 billion euros ($2.2 billion) in Italy this year as part of a

plan it presented to Rome after the departure of Tavares to

revitalise its output in the country.

The current year would be another tough one, Elkann said,

but production in Italy should start to pick up in 2026, helped

by 10 new product updates. However he injected a further note of

caution, saying tariffs and the shape of the market would

influence output.

The plan helped to improve relations between Italy's sole

major automaker, which employs around 40,000 people in the

country, and Rome after months of bitter confrontation.

However, some political tensions remain.

The League party, part of Prime Minister Giorgia Meloni's

right-wing coalition, on Wednesday said Stellantis ( STLA ) was favouring

investments and jobs abroad and had an excessive focus on EVs.

"Elkann should apologise to Italian workers," the League

said in a note released after the hearing in parliament.

Stellantis ( STLA ) last year manufactured fewer than 500,000

vehicles in Italy, down from 751,000 in 2023, with car

production in particular at its lowest since 1956.

($1 = 0.9179 euros)