War in Ukraine paralyses auto industry

War in Ukraine paralyses auto industry

Two leading car manufacturers have announced that they will stop their production lines for a while because of missing parts that they used to procure from Ukraine.

English NAGYVILÁG 2022. MÁRCIUS 3. 15:13

Shortly after the outbreak of the war in Ukraine, the automotive supplier Leoni closed both of its plants in the country. The company employs 7,000 people and produces car wiring systems. In addition to Leoni, an increasing number of suppliers have decided to suspend operations in western Ukraine, leaving the automotive industry in a serious situation worldwide. The most heavily affected companies in Europe are Volkswagen and BMW.

“The conflict in Ukraine has far-reaching effects on the production of the local supplier industry. The resulting production losses will gradually lead to production adjustments and interruptions in several BMW plants from the middle of the week,” an expert told Frankfurter Allgemeine Zeitung. Next week, vehicle production is expected to stop in Munich and Dingolfing. The same will happen to engine production in Steyr, Austria. The lines will also stop in Oxford at the plant of the BMW-owned Mini. In addition, the plants in Leipzig and Regensburg also need to reduce working hours and merge shifts. All this means that the Bavarian carmaker’s production for European markets is almost completely paralysed because of the war in Ukraine. A crisis management team is now working to get production up and running as soon as possible.

Besides BMW, the other major car manufacturer, Volkswagen, is also grappling with serious problems because of the unfolding situation. Initially, the company only merged shifts and introduced shorter working hours in anticipation of merely a few days of disruption. However, as the crisis in Ukraine appears to be dragging on, Volkswagen was forced to put urgent measures in place. From Monday, its Wolfsburg plant will cut back production and the group’s largest facility is expected to completely stop in two weeks. Also from Monday, the car manufactured is expected to shut down production at its Hannover commercial vehicle plant and the crisis will certainly affect its facility in Emden. Experts say finding alternative solutions in another country could take months.

English NAGYVILÁG

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