Stellantis to Temporarily Halt Production at Italian Plants

Stellantis has announced that production will temporarily pause at several key facilities in Italy due to challenging market conditions. The suspension will impact operations at the Pomigliano d’Arco Assembly Plant, the Termoli Engine Plant, and the Pratola Serra Engine Plant from November 11 to 29. This move is part of the automaker’s efforts to adapt to a shifting market landscape, as communicated to Italian trade unions earlier this week.

The Pomigliano d’Arco Assembly Plant near Naples produces models such as the Fiat Panda, Alfa Romeo Tonale, and Dodge Hornet. Meanwhile, the Termoli Engine Plant is a hub for producing the 2.0-liter GME-T4 I-4 turbocharged engines that power the Tonale, Hornet, as well as the Alfa Romeo Giulia, Alfa Romeo Stelvio, and Maserati Grecale. At the Pratola Serra Engine Plant, production centers on the Multijet II diesel engines, a staple for several of the company’s models sold across Europe.

In a statement, Stellantis outlined the reasoning behind this decision: “We are navigating a challenging path, which requires difficult choices and offers no easy solutions.” The automaker underscored its commitment to maintaining its Italian operations despite the temporary setbacks, aiming to “ensure the continuity” of its presence in Italy during this tough period.

Stellantis has been grappling with a mix of industry-wide and region-specific challenges. Demand for electric vehicles (EVs) has been lower than anticipated, particularly as these models often come with higher price tags. Adding to the complexity, the automaker faces increased competition from Chinese EV brands entering the European market. Notably, Stellantis has taken steps to bring models from the Chinese startup Leapmotor into its European dealerships, which will now compete against its legacy brands.

In addition to the pressures in Europe, Stellantis is dealing with an oversupply of vehicles in the U.S., which has led the company to adjust its financial outlook. The excess inventory has forced Stellantis to revise its profit and cash-flow forecasts downward as it tries to balance production levels with market demand.

The planned suspension of activities at these Italian facilities follows an earlier decision to pause operations at Stellantis’ Mirafiori Assembly Plant in Turin. Production of the Fiat 500e, a compact electric city car, as well as the Maserati GranTurismo and GranCabrio convertible, has been halted until November 1. This adjustment came as Stellantis adapted to reduced demand for certain models, even as the company remains committed to its electrification strategy.

The company has been discussing the upcoming production pause with Italian trade unions. Scaling back production at these facilities is intended as a short-term measure to better align output with demand while addressing excess stock in other markets.

Source: Reuters