Fiat says that an oversupply of Punto subcompact cars has forced it to halt production until demand catches up with the number of vehicles it has on hand.
Last month, only Volkswagen, Audi and BMW managed to improve their year-over-year sales in Europe. Fiat, which saw sales tumble more than 18 percent last month, is suffering the most among major European automakers.
Fiat CEO Sergio Marchionne has long said that overcapacity in Europe is spiraling out of control, but the automaker's various unions remain a major roadblock preventing it from shutting down factories.
Marchionne has estimated that the European new car market won't fully recover for at least a couple of years.
