The Italian government has fined a car company US$6.4 million ($5 million) for allegedly branding cars made in China as being produced in Italy.
DR Automobiles is misleading market cars as if they were produced in Italy, even though they were largely made in China, the country’s competition authority said.
The company said it would appeal the fine because it had never claimed its vehicles were entirely made in Italy.
Southern Italy-based DR Automobiles assembles low-cost vehicles using components produced by Chinese automakers Chery, BAIC and JAC.
The regulator said cars under the company’s DR and EVO brands were sold as being Italian-made but were largely of Chinese origin.
Only minor assembly and finishing work was carried out in Italy, the company said.
“This practice coincided with a period when the company recorded clear growth in sales of DR and EVO vehicles in the Italian market,” the authority added.
The move comes at a time when Italy and the European Union (EU) as a whole are cracking down on cars produced outside the trading bloc.
Last month, dozens of Moroccan-made Fiat Topolinos were seized in the Italian port city of Livorno because they bore the Italian flag insignia.
Fiat’s parent company Stellantis said it had followed the regulations but has since removed the flags from the vehicles.
In April, Alfa Romeo, another Italian brand under Stellantis, decided to rename its new Polish-made Milano model as Junior, following pressure from authorities.
Last week, the EU threatened to hit Chinese electric vehicles with import taxes of up to 38% after politicians called them a threat to the region’s car industry.
These duties would be on top of the current 10% tariff levied on all Chinese imports of electric cars into the EU.
In response, China said the tariffs violated international trade rules and described the investigation as “protectionism.”
The announcement came after the US last month increased the tariff on Chinese electric cars from 25% to 100%.
