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The shortage of parts from Ukrainian suppliers has forced German manufacturers, world-class players in this industry, to temporarily stop part of their vehicle production. Volkswagen decided to stop all production this week at its main plant in Wolfsburg.
The lack of wiring harnesses coming from Ukraine already trumps the shortage of semiconductors as the biggest supply chain headache for Germany’s auto industry.
Volkswagen, the world’s second largest carmaker, last week had to suspend production of electric vehicles for four days at its German plant in Zwickau and for three days at the Dresden plant. It has now decided to stop all production for this week at its main plant in Wolfsburg.
This company works with more than a dozen Ukrainian suppliers that mainly produce the wiring systems that connect all electronic components, such as taillights in cars.
😟 Ominous: Volkswagen will consider expanding production outside Europe if the conflict in Ukraine continues.
“For sure, we have to think about additional investments in the United States and overseas,” says boss Herbert Diess. https://t.co/Tqfuk3Wmmw
— Joe Miller (@JoeMillerJr) March 15, 2022
“There are already production suspensions caused by the war in Ukraine, both at Volkswagen, and at BMW and at Audi, as well as other car manufacturers,” revealed Stefan Bratzel, director of the Center for Automotive Management.
The war has also caused prices of certain metals to skyrocket, including aluminum, needed for car frames, and nickel, used to make electric car batteries.
Volkswagen Chief Financial Officer Arno Antlitz said rising raw material costs will drive up prices for electric and internal combustion engine vehicles. According to the company, if the war in Ukraine continues, the consequences for the industry would be even worse than those of the pandemic.
With Reuters and EFE
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