Fiat Chrysler Automobiles has suspended production for two weeks at a majority of its European plants. Italy, which has been hit hardest by the coronavirus pandemic—there are now more than 24,000 cases—is under lockdown, and other nations in the European Union are quickly following suit.
In a statement, the Italian-American auto group said it would suspend operations at a majority of its factories in Europe through March 27 in response to an “interruption in market demand.” The company said that six facilities in Italy would be closed, as well as plants in Serbia and Poland.
“The real problem is on the demand side, people are not buying cars now, and sales volumes are expected to be very bad in March, with a real impact on automakers’ earnings,” Marco Opipari, an analyst at Fidentiis, told Reuters.
Economists say that measures imposed to limit the spread of coronavirus in Italy are likely to push the country’s already fragile economy into a deep recession that will put hotels, travel companies, restaurants and other businesses under intense pressure.
At the time of post, shares in Fiat Chrysler were down nearly 22% in pre-market trading on the New York Stock Exchange following the announcement, while shares were down 17.4% in Milan.
Source: Equities News