Is Russia’s invasion of Ukraine impacting the global auto industry.
The crisis in Ukraine has caused disruptions at some auto assembly plants and prompted companies to suspend shipments to Russia. There are a number of auto parts factories in Ukraine that supply parts to Volkswagen and also Porsche and this is affecting production, but there are many auto manufacturers around the globe who have completely stopped delivering new cars and also spare parts to their Russian dealers and this is affecting sales and service of vehicles in the country
Production of the Volkswagen’s ID3 in Dresden is being stopped because Russia’s invasion of Ukraine has hit deliveries of key parts. Production of VW, Audi and Cupra compact battery-electric cars built on the VW Group’s MEB platform will be affected.
Let us explain. Europe’s auto production has come to a grinding halt in many factories as delivery of Ukraine made wire harnesses stops.
Ukraine company, ‘Leoni’ who is a leading global supplier of automotive wiring systems, says logistics in and out of Ukraine are a challenge.
Automakers including BMW and Porsche are struggling to obtain crucial wire harnesses as suppliers in western Ukraine have been shuttered by the Russian invasion of the country, forcing production stops at car factories in Germany.
Toyota Motor will halt production at its Russian factory starting Friday while vehicle imports into the country have also stopped indefinitely due to supply chain disruptions. Toyota is Russia’s top Japanese brand, producing about 80,000 vehicles at its St. Petersburg plant which employs 2,000.
Honda Motor has suspended all vehicle deliveries to Russia. The company is halting exports of cars and motorcycles to Russia, joining a growing number of global companies choosing not to do business in the country after its invasion of Ukraine.
The Ford Motor Co., in response to Russia’s invasion of Ukraine, said it informed joint venture partner Sollers it is immediately suspending operations in Russia until further notice.
Shares of Renault, the European automaker most exposed to Russia, tumbled to their lowest close since November 2020 as countries around the world escalate measures to penalize President Vladimir Putin for invading Ukraine.
British automakers Jaguar Land Rover and Aston Martin paused vehicle shipments to Russia, as sanctions over the war in Ukraine had created growing trading obstacles for the car industry.
Automotive Group, Stellantis sets up task forces as impact of Ukraine crisis on automakers intensifies. One of the task forces is monitoring sanctions imposed by the U.S. and its Western allies on Russia and how the automaker will comply with them. The other is keeping watch on the automaker’s 71 staff in Ukraine. The employees were safe as of the last update.
Volvo Cars said it will suspend car shipments and also spare parts to the Russian market until further notice.
Daimler Truck also said it would freeze its business activities in Russia with immediate effect, including its cooperation with Russian truck maker Kamaz.
Automotive technology supplier Aptiv shifted high-volume production of parts for vehicles out of Ukraine over the past couple months ahead of possible hostilities, CEO Kevin Clark said.
So, it looks like Russian new car sales will reduce drastically and their used car sales will rise. Meanwhile, what will happen to new car dealers who have invested heavily in showrooms and manpower? Will they manage to keep afloat without new car sales?
