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Fiat-Chrysler mulls closing European plant on parts shortage due to coronavirus disruptions

Highlights

Company operates 16 Italian sites

Wuhan an automotive industry hub

Rome — Fiat-Chrysler (FCA) on Friday warned one of its European plants could be forced to halt production in the coming weeks if the coronavirus outbreak continues to affect the capacity of Italy's largest carmaker to source spare parts from Chinese suppliers.

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"If the situation in China continues to worsen, FCA has identified potential risk within the next two to four weeks at one manufacturing facility in Europe," a company spokesman told S&P Global Platts. "The group will continue to monitor the situation and continues to develop contingency plans to support its global manufacturing."

While there is no immediate effect on the group, the company is continuing to monitor global supply chain developments, the spokesman added, in light of the effects the disruption to component part supplies could have on its European production activities.

The company operates 24 European automotive and component sites, 16 of which are in Italy, according to its website. The others are in France, Poland, Portugal, Romania, Serbia and Spain.

The spokesman declined to provide any more information on the potential closure or on the impact on the company's operations elsewhere in the world. Globally, FCA operates 102 manufacturing facilities, according to its website.

FCA is the latest international company to raise alarm bells about dwindling supplies from Chinese producers as the coronavirus outbreak wrecks havoc on sectors including automotive manufacturing, tourism, aviation and technology.

Numerous automotive industry companies and component makers, who use aluminum and aluminum alloys, for carmakers around the world are based in Wuhan, the city where the outbreak began.

Even as coronavirus cases have spread around the globe, it's presence is rooted in the province of Hubei, which has suffered 97% of all deaths from the outbreak, as well as its population making up some 67% of all patients. Wuhan is the capital of Hubei.

The carmaker, one of Europe's largest, joined Virgin Atlantic and Nintendo in adding its name to the list of affected companies.

Numerous companies – such as Toyota, Peugeot-Citroen, Apple, Disney, Nintendo and Virgin Atlantic – have announced major disruptions to their operations as a result of the outbreak, while Adidas, Boss, H&M, Nike, the GAP, Ikea, McDonald's and Starbucks have closed some of their Chinese stores. Fiat is the first company to say some of its European operations are at risk as a result of the outbreak.

In January, Fiat-Chrysler had an Italian market share of 25.6%, up from 23.6% in December and 22.7% in November.