Ukraine produces automotive components, mainly wire harnesses
The war is making it difficult to export parts from Ukraine
Volkswagen, Porsche and BMW will have to suspend some of their production
The War in Ukraine has consequences for the automotive industry, since BMW and the VW Group, including Porsche, will have to stop some of their assembly lines for a while.
Indeed, Ukraine is home to a few automotive parts suppliers which make different components used in cars built throughout Europe and especially in Germany.
According to a 2020 report, the eastern-European country was responsible for 7% of all of the wire harnesses imported into the European Union. Due to the proximity of Ukraine to Germany, where many automakers have factories, around 22 companies operate 38 facilities in this country which supply car parts.
Due to the war, exports from Ukraine have become much more difficult, which means that the components are not reaching the automotive factories on time. The component which is the most problematic is wire harnesses.
These harnesses are crucial in any vehicles, but even more so in electric vehicles, which is why Volkswagen and Audi announced they would suspend production of their EVs for a couple of days in order to refill their stockpile of harnesses.
Porsche, which is also part of the VW Group, has now announced it will also limit its production temporarily due to a shortage of harnesses and BMW said interruptions to its output are to be expected despite the automaker working with suppliers to rectify the situation as soon as possible.
This new strain on the automotive industry comes at a time where the shortages of electronic chips and semiconductors caused by the pandemic have not been eradicated yet, so automakers, particularly European ones, should expect another year of slow sales.
In response to the invasion of Ukraine by Russia, many automakers have decided to halt their operations in Russia. Indeed, Ford, Honda, Toyota, Volkswagen and Volvo have stopped selling cars to Russia, while Mercedes-Benz, Stellantis and Volkswagen have pledged to provide financial assistance to Ukraine.
