Italy’s antitrust authority fined a local automobile company €6 million ($6.4 million) after determining it had illegally labeled vehicles from Chinese manufacturers including Chery Automobile Co. as Italian-made. 

DR Automobiles has been promoting cars from Chery, BAIC Motor Corp. and Anhui Jianghua Automobile Group, or JAC Motors, as Italian-made since at least December 2021, the agency said on its website. The China-made cars have been marketed under the DR and EVO brands after “final touches” in Italy, it said. 

The move extends a crackdown in recent months by the government of Prime Minister Giorgia Meloni over foreign-built vehicles that give the impression of being made in Italy. In May, financial police seized dozens of Fiat Topolinos produced in Morocco because they sported an Italian flag. Parent company Stellantis NV was also forced to rename a new Alfa Romeo after Rome took issue with the group’s plan to call the Polish-made SUV the Milano. 

DR, which is based in Macchia d’Isernia north of Naples, said it would appeal the ruling. Its vehicles are only 60-70% pre-assembled in China, a spokesman said by phone on Thursday, adding that the company makes important changes at its factory to meet European regulations, for example with fuel systems and collision standards. 

Partly building cars in Asia is common practice in the automotive sector and “has never been hidden from the public,” DR said. Its advertising “never intended to publicize the alleged complete manufacturing of cars in Italy.”

Meloni’s government has also clashed with Fiat owner Stellantis over plans to move production to lower-cost countries, as European governments press automakers to preserve well-paying jobs. Last week, the European Union raised tariffs on Chinese-made battery-electric vehicles to as much as 48%, a move aimed at protecting local automakers from low-cost competition on products that are critical to the region’s sustainability goals.

The DR 1.0 city car is based on Chery’s eQ1, a popular model in its home country. Chery has taken over a former Nissan factory in Barcelona and aims to start producing EVs there by the end of this year. 

DR Automobiles expects to be subject to EU tariffs on Chinese electric vehicles for the EV model it sells, the spokesman said. The company is planning to add an Italian plant to bolster local assembly, he said.