MILAN -- Most of Fiat Chrysler Automobiles’ European assembly plants have remained closed or are working at minimal levels, as demand remains low and inventories are high despite the easing of coronavirus restrictions.
FCA closed its factories in Europe on March 16 as governments imposed lockdowns to check the spread of the virus.
The automaker partly reopened three factories in Italy at the end of April, including its Sevel joint van factory with PSA and production of the Jeep Renegade and Compass plug-in hybrids, key models to meet emissions targets. Preparatory works for the new Fiat electric 500 small car are also continuing.
CEO Mike Manley has said that in the restart phase the automaker will be prioritizing electrified vehicles and “higher margin products and models with low existing inventory levels.”
“Production levels will be aligned to consumer demand, to ensure we do not build up inventory,” Manley said.
FCA dealer inventory was 227,000 units at the end of March, 20,000 less than the end of March 2019, CFO Richard Palmer told analysts. Normally that would amount to about three months of demand, but with sales stalled in Europe it now represents at least six months of demand.
FCA sold a total of 10,952 vehicles in April in Europe, down from 88,888 in April 2019. It sold 36,500 units in May in the largest five markets (Germany, UK, France, Italy, Spain), down 57 percent from the same month of 2019.
Registrations in Italy fell for a fifth straight month in May, when Rome started to progressively lift lockdown measures, with nationwide registrations down 50 percent.
A union representative said Wednesday that the planned restart of production of the Panda minicar at FCA’s plant in Pomigliano, near Naples in southern Italy, has been delayed due to poor market demand.
Gianluca Ficco of the UILM union told Reuters that FCA wanted to avoid restarting production, initially scheduled for Monday, and then stopping it again. "It chose to wait for feedback on sales at the beginning of June to decide when the right time is," Ficco said.
Outside of Panda production, the following plants remain closed or were running at very low levels, according to FCA, unions and news reports:
- The factory in Kragujevac, Serbia, where the Fiat 500L small minivan is built, has not reopened and will be closed at least until June 12.
- The factory in Tychy, Poland, which assembles the Fiat 500 minicar and Lancia small hatchback, will not restart until at least the week of June 8.
- In Italy, the Cassino plant where all Alfa Romeos are built reopened May 19, but closed again on May 22 and will remain closed until at least June 30. Workers have been temporarily laid off, and their salaries are being paid by the government under coronavirus aid plans.
- Activities at the factory in Melfi, Italy, which reopened at the end of April, are centered on the plug-in hybrid versions of the Jeep Renegade and Compass. Production of the internal-combustion engine versions of both Jeep models and of the Fiat 500X compact crossover will be stopped from June 11 to June 30, with workers being temporarily laid off.
- Production of Maserati models at the Grugliasco and Mirafiori plants, in Turin, has been reduced. Production of the Levante midsize SUV in Mirafiori will continue until Friday, but will be halted next week.
In addition to those measures, according to the FIOM union, FCA has asked the government to extend temporary furloughs for a total of 9,299 employees in the Turin area, starting from June 23 until the end of July. That figure includes 1,065 workers at the Mirafiori Meccaniche transmission plant, and 6,766 white-collar workers at FCA's Turin headquarters. The government’s 14 weeks of coronavirus-related furloughs have already been used.
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Fiat slow to resume output, with demand low and inventories high - Automotive News Europe
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