MILAN, Oct 25 - 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.