Following the news that Fiat-Chrysler (FCA) is warning that it could halt production at a European plant in a matter of weeks, David Leggett, Automotive Editor at GlobalData, commented:
“We have been waiting for this and it is an inevitable consequence of the deepening and spreading economic impact of the coronavirus, especially on manufacturing supply chains. Many factories in the Wuhan and Hubei province have been on lockdown since the start of the Chinese New Year holidays.
“The emerging problems for FCA outside of China are likely to be mirrored by other vehicle manufacturers and reflect both the long-run internationalization of parts supply-chains and the predominance of ‘just-in-time’ lean manufacturing processes that keep inventory low.
Legget also said he believes the next few weeks will be critical for automakers. The typical car is made up of 20,000 parts, and there is an elongated supply-chain of parts and sub-assemblies put together in complex sequence to create the finished vehicle.
“Korean manufacturers were the first to show up as impacted by China supply-chain disruption reflecting shorter shipment distances between China and Korea, but the FCA news indicates that impacts across the world are now coming over the horizon on shipment transit schedules,” he concluded.