Stellantis will temporarily close factories in France and Italy for a few weeks from October as inventories of Fiat and Alfa Romeo models build up, and analysts say further short-term plant shutdowns across Europe cannot be ruled out.
The closures come amid an EU car market that, while showing a sales uptick in August, remains weaker year-to-date and faces sharper competition from Asian makers and Chinese exporters.
Stellantis has informed staff that thousands of workers will be sent home or offered training during the October production breaks. The group, which owns 14 American and European brands, is facing pressure from higher import duties and slowing demand in key markets.
Volkswagen has also cut output. The Zwickau plant will halt production for a week starting Oct. 6 because of weak demand for the Audi Q4 e‑tron, a plant spokesman said. Bloomberg reported that the Emden plant, which produces the ID.4 and ID.7, is expected to shut down production lines for several days; employee work hours have been reduced at other sites as well.
“I don’t rule out that more factories will close temporarily,” Marieke Kuijpers, sector manager of Mobility & Logistics at Rabobank, told Bloomberg.
Kuijpers said Stellantis is taking the hardest financial hit in the current market. “The factories for American brands, for example, are in Mexico and the EU, and now have to pay high import duties,” she said. “The European factories are struggling with lower sales because there are more competitors on the continent, for example from China.”
She added that the group’s size brings efficiency: many platforms and designs are reused across brands, which reduces costs but can make models more similar. “New competitors often offer a model with more innovation for the same price,” Kuijpers said.
Germany’s auto industry, Europe’s largest, faces related challenges. The 15 percent import duty on European auto parts to the U.S. is lower, but still “a significant burden,” according to Germany’s economy minister. German makers are also seeing weaker sales in China as Chinese brands expand exports to Western markets.
Industry group BOVAG warned earlier this year that, at the current rate, 10 percent of cars sold in Europe could be Chinese by 2030. While EU sales rose in August, Kuijpers cautioned that “possibly it only follows the growing European economy.”
A BOVAG spokesman said Dutch car sales fell in August and “continue to languish.” He added: “Sales of electric cars are declining slightly due to uncertainty about taxes. We do expect a sprint at the end of the year.”
Tax changes are weighing on electric vehicle demand. From January, the lower additional tax on electric cars will stop. Anyone leasing such a model as of 2026 will receive the same additional tax rate as for a fuel car. An electric model registered in 2025 will keep the additional tax credit for sixty months, which means the lease driver will pay less tax for years.
Section chairman Huub Dubbelman of RAI Association said many new models will be launched this fall. “This may cause consumers to wait a while for this,” he said.
Kuijpers expects European marques to be overtaken by Asian competitors in the near term. “Korean Kia and Hyundai and Japanese Toyota are doing very well. They are just ahead of us with electric and hybrid models. They have better technology and more offerings,” she said, noting plug-in hybrid cars are currently selling in Europe.
Despite EU measures such as higher import duties on Chinese models, the European auto industry remains under strain. Some premium makers are holding up: BMW reports stable sales in Europe and Ferrari is growing, which Kuijpers attributes to brand heritage. “These brands have a rich history, so drivers are not likely to switch brands,” she argued. “The jump from an Opel to a Toyota is much smaller.”
