Within the last week, several European automotive manufactures we forced to close plants across the region as the COVID-19 situation continues to disrupt industries across the globe. The crisis has forced large and reputable brands to close as consumer demand drops and health and government officials work to contain the outbreak. As numerous health and government officials have expressed, things are expected to get worse internationally both health-wise and economically.
Car sales have dropped dramatically in Europe especially in Italy which is an area under a complete national lockdown implemented to minimize COVID-19 cases. The auto facility closures further demonstrate how this disease is creating even more uncertainty worldwide and causing sales to plummet. The European region will continue to see drastic changes to its market landscape as consumer demand continues to decline and supply capabilities are compromised.
The latest with Fiat Chrysler and PSA Group
Fiat Chrysler, the Italian-American car manufacturer, made an announcement on Monday that the company is suspending the majority of its services in Europe now through March 27. This adjustment includes eight closures: six locations in Italy as well as locations in Serbia and Poland. The company also has a serious presence in China, the U.S, and Latin America.
Facilities in these locations will undoubtedly experience further restraints as travel and government restrictions persist. Fiat Chrysler also owns luxury-brand Maserati, which has been impacted by Italy’s national lockdown. Additionally, Ferrari announced that it is temporarily closing two production plants.
Fiat Chrysler is in the process of merging with the French company PSA Group, whose portfolio includes Peugeot, Citroen Vauxhall and Opel. PSA Group also announced on Monday that it would have closures of its own through the end of this month, spanning France, Spain, Germany and the UK.
Nissan is feeling it, too
The Nissan brand is facing unique challenges as well with their plant in the UK being impacted by changes as a result of the Brexit ruling with the UK being in the process of negotiating with the European Union on a potential free-trade agreement.
The Nissan location in Spain is also generally facing low consumer demand. Chairman of Nissan Europe, Gianluca de Ficchy shared via a press conference that without a free-trade agreement, the company would be unable to sell cars in the region.
Ficchy also shared that Nissan expects to continue to see lower sales in Europe in 2020 and is in the process of determining updated sales strategies in Spain specifically. Last spring in April 2019, Nissan announced its plan of reducing 600 positions at its plant in Spain.
Volkswagen Works to Maintain Normalcy
Volkswagen, the world’s largest automotive manufacture confirmed on Monday that the company is equipped with all of the necessary materials to continue its production at the present moment. The company is taking additional precautions with staff to ensure workplace safety.
Future Automotive Sales Predictions
A glimmer of hope in regards to the international automotive sales decline is that China is slowly starting to come back online after its initial COVID-19 outbreak. China is the largest automotive market and its factories are beginning to return to normal.