MILAN - Stellantis ( STLA ) said on Friday it would start production of a new Lancia Gamma mid-sized car in 2026 at its Melfi plant in southern Italy, as the Franco-Italian automaker hopes new models will help it relaunch its output in the country.

Stellantis ( STLA ), whose other brands include Fiat and Alfa Romeo, has fallen under heavy political criticism in Italy due to its declining local production, amid soft demand and plans to build some new models of its historic Italian brands abroad.

The company's output in the country is expected to fall below 500,000 vehicles this year, according to forecasts by the FIM-CISL union, from 751,000 in 2023.

Between January and September output at Stellantis' ( STLA ) Italian assembly plants fell more than 30%, with a 62% decline for Melfi, FIM-CISL has said.

The company has a multi-year plan to start production of five new mid-sized models in Melfi from a range of brands, including Lancia, for the European and Middle East markets, all based on its new 'STLA Medium' platform.

Stellantis ( STLA ) said this month it would also start production of the latest version of its best-selling Jeep Compass mid-sized SUV at Melfi next year, as well as a new car under its premium DS brand.

The production of the new Lancia Gamma in Melfi reflects Stellantis' ( STLA ) commitment to its Italian facilities, the group said in a statement.