Fiat Chrysler production at risk due to coronavirus

7 February 2020

Fiat Chrysler (FCA) has warned it could close one of its European plants this month as it struggles to source key parts from China following the outbreak of coronavirus. 

FCA’s chief executive Mike Manley told the Financial Times four of its Chinese suppliers had been affected by coronavirus, including one “critical” maker of parts. 

“We’ve got one high-risk supply at the moment that we have identified,” he said. 

Manley added the automaker would know within two to four weeks “whether supply will be halted” for one European plant, but he did not specify which one.

He added if Chinese factory closures remain in place throughout February, the other three component makers “will also become critical”. 

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, told SM the body is “closely monitoring” the situation in China.

“Global automotive supply chains are complex and deeply integrated so any event that causes disruption and, potentially, plant shutdowns, as a result, is very concerning. 

“Manufacturers will be working to adapt their processes to help mitigate any potential supply issues. The immediate priority, however, must be the health and wellbeing of workers and the general public,” he said. 

Carmakers included Toyota, Honda, PSA Group, Volkswagen, Ford and Tesla have also been hit by production delays following the outbreak. 

Earlier this week, Hyundai announced the closure of several of its factories in South Korea due to shortages of wiring harnesses used in electrical systems. Many of its suppliers are based in China. 

Meanwhile, Foxconn – a key manufacturer of the Apple iPhone – has announced it will switch part of its production line to manufacture surgical masks for its own staff and to meet soaring global demand for them.

“In this war against the epidemic, every second counts,” the company said.

“The earlier we take precautionary actions, the earlier we can prevent the virus, the earlier we can save lives, the sooner we can overcome this.”

A test run of masks has already started at Foxconn’s manufacturing plant in Shenzhen, southern China. The firm hopes to increase production to 2m masks by the end of the month. 

Separately, Burberry said the virus was having a “material negative effect on luxury demand”.

The luxury fashion brand added it is “taking mitigating actions” to limit the impact of the outbreak on its business, adding while it can’t predict “how long this situation will last”, it is confident in its strategy.

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