Ukraine exports 7 percent of all wire harnesses for the European Union.
The automotive industry hasn’t yet recovered from the global chip shortage and it has to face another supply chain issue. Some automakers are having difficulties obtaining wire harnesses as a result of the Russian invasion in Ukraine. Several major suppliers have been affected, thus disrupting the production of vehicles from some European manufacturers.
According to Reuters, supplier companies like Leoni, Fujikura, and Nexans are struggling to supply wire harnesses, which forced Volkswagen and Porsche to suspend production at some of their plants. BMW has also been affected and the company told the online publication it is in talks with its distributors to address the problem as soon as possible.
“Due to supply bottlenecks, interruptions to our production will occur,” BMW announced in a statement, quoted by Reuters. “We are in intensive discussions with our suppliers.”
Some of the largest German automotive supply companies, including Forschner, Kromberg & Schubert, Prettl, and SEBN, are operating production sites for components in Western Ukraine, which is currently being shuttered by the Russian army. Leoni is attempting to “compensate for production losses” and “interruptions in our two plants in Stryi and Kolomyja, triggered by the Russian war of aggression against Ukraine.”
An analysis of 2020 Comtrade data by consultancy AlixPartners says Ukraine was responsible for about 7 percent of the wire harnesses imported into the European Union. Plants in the cities of Stryi and Kolomyja produce high-quality components for the automotive industry, not just wiring harnesses, giving jobs to approximately 60,000 people. Roughly 22 companies have invested more than $600 million in 38 plants in the country. Most of those plants are close to car factories of German automakers in other European countries.
The war in Ukraine already forced many automakers to freeze their businesses in Russia. Many, including Volvo, Volkswagen, Ford, Honda, Toyota, and others, have decided to halt exports of vehicles and motorcycles to the country. VW, Mercedes-Benz, and Stellantis will donate money to Ukraine assistance.
Keyword: Wire Harness Shortage: War In Ukraine Affects Production Of Porsche, BMW