Ukraine war cost German automakers 150K vehicles in March

Europe

German automakers lost about 150,000 vehicles from their March production plans because of supply shortages stemming from the war in Ukraine, according to an LMC Automotive estimate.

The German operations of Volkswagen, Mercedes-Benz and BMW have been among the manufacturers most heavily impacted by the war, which has sent shock waves through the European supply chain.

Germany’s automakers are being affected more than others in large part because of the country’s proximity to Ukraine and their dependence on it for wire harnesses, cables and other components, said Jeff Schuster, president of global vehicle forecasting at LMC.

Some Ukrainian suppliers have managed to continue operating during the war, but Russia’s invasion of the country has left many automakers without access to components they need.

“The good news is some suppliers are still operating, and some have restarted,” Schuster said. “There is some flow coming out. But overall, it’s the proximity that’s really left [the German operations] exposed.”

VW Group, in particular, has been hurt by the supply chain disruptions. LMC estimates that five VW plants lost more than 10,000 units of planned production during March, and three of those had to cut more than 20,000 vehicles.

Schuster cautioned that predictions are difficult amid the war’s uncertainties, but LMC anticipates that Germany’s automakers will see April production levels faring better than March.

Automakers such as VW have been quick to find new sources for parts that have been interrupted from Ukraine. Those parts are beginning to be sourced from other Eastern European countries, including Romania and Hungary, or from outside Europe entirely.

“All of that takes a little bit of time, but one of the things I find remarkable about the industry is how resilient it is and how quick it is to adapt,” Schuster said. “We would expect to see less impact in April, if all things hold as they are now without any further issues.

“If there ends up being some sort of a treaty or resolution, that would most certainly be a better situation.”

Here are some of the developments around the industry last week stemming from the war:

  • Supply bottlenecks and a shortage of wire harnesses forced Volkswagen to delay the launch of its ID5 electric vehicle by one month, until May 6, according to the automaker. The ID5 is built at a plant in Zwickau, Germany.
  • Renault is reportedly considering transferring ownership of its majority-held Russian venture AvtoVAZ to a local investor as a way to exit Russia. A transfer would help free the automaker from legal responsibilities to AvtoVAZ, Bloomberg reported, citing people familiar with the matter.
  • Mercedes-Benz was forced to make production cuts at its Sindelfingen, Germany, plant because of war-related supply challenges, though it continues to operate. The plant builds the brand’s E-Class, S-Class and EQS models.
  • Porsche has cut shifts at factories in Zuffenhausen and Leipzig, Germany, because of parts shortages. The plants operated on reduced levels last week, a Porsche spokesperson said.
  • Greenway, Poland’s largest electric vehicle infrastructure provider, is offering free charging to Ukrainian refugees who have fled the country, Automotive News Europe reported. Poland and Ukraine share about 530 miles of border on Poland’s east and Ukraine’s west.

Reuters, Bloomberg, Automotive News Europe and Automobilwoche contributed to this report.

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