DETROIT – The threat from the coronavirus crisis closed in on the global auto industry on Thursday, as Fiat Chrysler Automobiles NV warned that a European plant could shut down within two to four weeks if Chinese parts suppliers cannot get back to work.
The next several weeks will be critical for automakers for parts made in China are used in millions of vehicles assembled elsewhere, and China’s Hubei province, epicenter of the outbreak, is a major hub for vehicle parts production and shipments.
Industry experts said auto suppliers had built up a cushion of parts in inventory and in-transit ahead of the long Chinese New Year holiday in late January. Those will start to run out if Chinese parts factories cannot get back to work next week, or if flights to and from China remain limited.
Chinese auto parts and assembly plants have extended previously planned shutdowns through Feb. 9 but some have pushed the shutdowns out further.
Fiat Chrysler chief executive officer Mike Manley said Thursday the automaker could be forced to suspend production at a European assembly plant if parts don’t begin to flow within two to four weeks. He did not identify the plant or vehicles at risk.
Other global automakers have not disclosed details about potential disruptions outside China, but have said they are monitoring the risks.
Still, not all the production from China’s Hubei province can be easily replaced or moved. Hubei is one of 11 Chinese provinces that are responsible for more than two-thirds of vehicle production in China, IHS Markit said in a study.
If plants remain idled into March, the production losses within China would become significant, amounting to more than 1.7 million vehicles of lost production during the first quarter, IHS projected. (Reuters)
