The Italian government has fined a car company $6.4m (£5m) for allegedly branding vehicles that were made in China as being produced in Italy.
DR Automobiles misleadingly marketed cars as being produced in Italy, even though they were mostly made in China, according to the country’s competition regulator.
The firm said it would appeal against the fine as it had never claimed its vehicles were completely made in Italy.
Southern Italy-based DR Automobiles assembles low-cost vehicles, using components produced by Chinese car makers 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, it said.
“This practice has coincided with a period in which the company recorded marked growth in sales of DR and EVO vehicles in the Italian market,” the authority added.
The move comes as Italy and the European Union (EU) as a whole are cracking down on cars produced outside the trading bloc.
Last month, dozens of Morocco-made Fiat Topolinos were seized in the Italian port of Livorno because they had Italian flag insignia.
Fiat’s parent company Stellantis said it had followed regulations but has since removed the flags from the vehicles.
In April, Alfa Romeo, which is another Italian brand under Stellantis, decided to rename its new, Poland-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 motor industry.
These charges would come on top of the current rate of 10% levied on all Chinese electric car imports to 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 raised its tariff on Chinese electric cars from 25% to 100%.