Stellantis Halts Mirafiori Production Amidst EV and Luxury Car Demand Slump
1min read Stellantis (STLA.US), responding to dwindling demand for electric and luxury vehicles in Italy, has announced a temporary halt in production at its Mirafiori plant in Turin. The shutdown, affecting the Fiat 500 electric vehicle and Maserati's GranTurismo and GranCabrio models, will commence on December 2nd and extend through January 5th.
This decision comes amidst a downturn in Europe's electric vehicle sales and a noted decline in luxury car demand from the U.S. and China. Stellantis is grappling with a challenging European automotive market and mounting competition, already having paused production in Italy multiple times this year.
Electric vehicles account for a significant 97% of the output at Mirafiori, highlighting the strategic hit from this slowdown. Over the first ten months of this year, the European city electric car market has contracted by over 50% compared to the same period in 2023. Consequently, Stellantis has seen a 41% reduction in passenger car production in Italy, raising concerns about potential job losses.
The company's move adds pressure to Italian Prime Minister Giorgia Meloni's goal of increasing national car production to one million units by 2030. Tensions are evident between Stellantis CEO Carlos Tavares and the Italian government regarding shifts in production to countries with lower costs and the need for incentives for electric vehicles.
In light of profit declines, Stellantis plans to cut costs, having announced the closure of a van factory in Luton, UK. The automaker has requested more governmental financial assistance next year to cover the costs associated with temporary shutdowns.
This trend is not isolated. Other car manufacturers, like Germany's Volkswagen, are undergoing substantial adjustments, including factory closures and workforce reductions. Similarly, Ford has cut back on electric vehicle production and jobs in Europe, underscoring an industry-wide recalibration amid dwindling demand.
Despite these production challenges, parts of the Turin site remain operational, including its administrative and research facilities, which employ approximately 13,000 workers.