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Thursday, May 19, 2022

Automakers are restructuring supply chains due to Ukraine war

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Russia’s war of aggression against Ukraine is exacerbating supply bottlenecks for German automakers. “We expect noticeable effects on logistics and supply chains with repercussions on factories in Germany and Europe, but also elsewhere,” Hildegard Müller, president of the Automotive Industry Association (VDA), said in the new edition of “Automobilwoche”. Russian and Ukrainian deliveries failed to materialize. Ukraine is a manufacturing center for wire harnesses, which is now idle.

Audi group purchasing manager Dirk Große-Loheide told the trade magazine: “This will give us headaches for many weeks.” The first replacement deliveries for urgently needed cable harnesses now come from Romania. “We have been in production for about ten days,” said Große-Loheide. According to information from “Automobilwoche”, Ford in Saarlouis is missing not only the cable harnesses, but also parts for the Ford Focus steering wheels, which would normally also come from Ukraine.

Therefore, automakers are helping their suppliers move production to safe locations. According to information from “Automobilwoche”, the two automotive suppliers Aptiv and Leoni are going to expand their capacities at other plants. “We are trying to maintain production with our suppliers. We are also looking to do this temporarily in other countries,” said Porsche boss Oliver Blume of the trade magazine. According to the report, BMW and Mercedes-Benz also help without bureaucracy.

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