MILAN, ITALY/STOCKHOLM – Fiat Chrysler Automobiles NV could halt production at one of its factories in Europe because of supply chain difficulties due to the new coronavirus outbreak in China, the firm’s CEO has said.
The prospective closure would be the first for a European car manufacturer.
CEO Mike Manley said four Chinese suppliers had been affected by the coronavirus outbreak, including one that was “critical,” according to a report in Thursday’s Financial Times. The Italian-U.S. company would know within two to four weeks “whether supply will be halted for one of our European plants,” Manley said.
Fiat Chrysler financial director Richard Palmer said Thursday that the impact of the coronavirus outbreak on the company “cannot yet be calculated.”
On Thursday, the company announced its net earnings were down by nearly a fifth last year as sales slowed, although both rose in the final quarter. Fiat Chrysler, which is set to merge with France’s Peugeot-Citroen to create the world’s third-largest automaker by revenues, saw net earnings fall 19 percent to €2.7 billion ($3.0 billion) in 2019.
Germany’s Volkswagen has already suspended some production in China because of the coronavirus outbreak.
Chinese-owned Swedish automaker Volvo Car Corp. has said that it sold a record number of cars in 2019 and expected continued growth in 2020 despite concerns over the new coronavirus. The company broke its sales record for the sixth consecutive year.
“I am very pleased to see that for the first time in our history we sold more than 700,000 cars,” CEO Hakan Samuelsson said Thursday in Stockholm.
Sales increased in all of its three main markets, going up 7.0 percent in Europe, 10.1 percent in the United States and 18.7 percent in China. Revenue for the year rose 8.5 percent to 274 billion Swedish kronor.
The carmaker, which is owned by China’s Zhejiang Geely Holding Group Co., reported a net profit of 7.1 billion kronor ($740 million, €673 million), up from 6.8 billion kronor the previous year. Volvo Cars did not give an expected sales figure for 2020, only saying it expected “continued growth in sales and revenue.”
The company sells more cars in China than in any other country, and said the new coronavirus “at this stage, will impact the first quarter results.”
It would strive to offset any impact over the remainder of the year, it added.
After Volvo Cars was bought by Geely from Ford Motor Co. in 2010, the iconic safety-focused Swedish brand has improved its image and accounts. It has already made strides in the area of autonomous cars and has said it now wants to focus on the electrification of its vehicles.
Volvo Cars announced in 2017 that it would launch only new electric or hybrid models from 2019 onwards, preparing for “an era beyond the internal combustion engine.”