Stellantis is following in the footsteps of Ford.
The former is halting production of its Fiat EVs. This is slated to occur from December 2 - January 5. It is affecting the Turin factory, due to uncertainty in the European market.
It is actually a two week shut down since there was a schedule halt due to maintenance for the last two weeks of December.
Stellantis Halts Production of Fiat EV
This is one of the legacy automakers that is in extreme trouble. The shutdown in Turin comes on the heels of one in the UK. That affected roughly 1,000 workers.
In the United States, Stellantis has the most days of inventory of any company. They are over the 150 day mark. Most try to have that number around 60.
Actions by the company led to lawsuits filed by the dealers, citing that insistent pushing of vehicles on the dealers, an attempt to keep its numbers up. To move these vehicles, the automaker is going to have to offer some massive incentives, something it so far resisted.
One of the issues for all legacy autos is they are falling behind in the EV game. Legacy auto, for the most part, does not have compelling electric vehicles. Globally, EV sales will be up around 25% over 2023. This is being led by China which is seeing sales skyrocket.
China is becoming a problem center for legacy auto. They are losing market share, as the China companies start to expand their offerings. The world's largest auto market was a major profit center for the traditional automakers.
Unfortunately for them, it is no longer the case.
At the core of this is the fact that China is going electric, a fact that legacy auto is trying to combat with substandard products.
So far, the issues are affecting German, US, and Japanese automakers. Nissan is the latest company to sound the alarm of how dire things are.
Death of Legacy Auto
By the early 2030s, legacy auto will be a thumbnail of what it is today. The next few years will likely see some entering bankruptcy. This is going to put governments in position of having to determine whether the auto industry is saved.
For a country like Japan, this might be impossible. With a number of manufacturers that could be in trouble, the country simply lacks the finances to bail everyone out. It means choices will be required.
We are literally seeing a repeat of the mobile phone market. Legacy phone makers do a fraction of the business they use to. Motorola, Ericsson and Nokia were the dominate players. Today, the smartphone market is Apple, Samsung, and a number of Chinese companies such as Huawei.
By the beginning the next decade, we will see the market capitalization of these companies much reduced. They are going to continue to lose market share as ICE is replaced with electric. The fact that production levels of the latter is lagging prevents instant carnage. Even without that, companies are still feeling the pinch.
This was something that was predicted. China is showing how things will unfold. The number of ICE vehicles being sold in that country are declining, especially legacy auto.
We can expect more announcements like the one Stellantis is making. It is only going to accelerate.