World News

Fiat Chrysler halts production in Serbia over China disruption

MILAN (Reuters) – Fiat Chrysler (FCA) <FCHA.MI> said on Friday it had temporarily halted production at its Serbian plant, the first such suspension by an automaker in Europe in response to the coronavirus outbreak in China.

Planned downtime at the Kragujevac plant in Serbia, where FCA builds its Fiat 500L car, has been rescheduled “due to availability of certain components sourced in China”, a spokesman for the Italian American automaker said.

He said the supply of audio system parts had been disrupted.

Chief Executive Mike Manley said last week that disruptions to auto parts production in China could threaten output at one of FCA’s European plants within two to four weeks.

The next few weeks will be critical for automakers.

Parts made in China are used in millions of vehicles assembled around the world. China’s Hubei province, epicentre of the coronavirus outbreak, is a major hub for vehicle parts production and shipments.

Hyundai <005380.KS> earlier this month suspended production in South Korea because of the coronavirus outbreak, the first major carmaker to do so outside of China.

Hyundai and sister firm Kia Motors <000270.KS> said on Monday said they would gradually increase production in South Korea from this week.

Production at Serbia’s Karagujevac plant would restart this month, an FCA spokesman said, adding that the group did not expect the announced changes would affect total production forecasts for this month.

“We’re in the process of securing future supply of those affected parts,” the spokesman said.

(Reporting by Giulio Piovaccari; Editing by James Mackenzie and Edmund Blair)