According to CEO Herbert Diess, the Volkswagen automaker is preparing for a “total failure” of production in Ukraine. “That is why we started the relocation of production, but this will take some time,” Diess said Tuesday. The key bottleneck in car production today is the supply of wiring harnesses. The group also expects commodity prices to continue rising if the war in Ukraine lasts longer.
“We source wire harnesses from Ukraine, from eleven factories, nine of which are still producing at reduced capacity,” Diess continued. At present, 30 to 40 percent of normal production capacity would still be reached. However, it cannot be assumed that this can be maintained. Therefore, VW has started preparations for the relocation of production and the establishment of additional capacities for the manufacture of wire harnesses.
He himself did not believe in a war in Ukraine until it broke out, Diess said: “What happened in Ukraine was not on our radar.” However, the group “was not unprepared”. The relocation of production had already begun three weeks before the outbreak of the war.