Europe’s carmakers scramble to replace Ukrainian auto parts – Reuters.com
BERLIN, March 11 (Reuters) – Carmakers including Volkswagen (VOWG_p.DE) and BMW are scrambling to find alternative sources of vital parts made in Ukraine from as far afield as China and Mexico, as Russia’s invasion halts assembly lines and breaks complex supply chains.
The hunt for new supplies is the latest challenge for an auto industry already reeling from soaring metal and energy prices, supply chains snarled by the pandemic, and a shortage of semiconductor chips. read more
The fighting in Ukraine has now disrupted output of wire harnesses, which bundle up to 5 km (3.1 miles) of cables in the average car. Unique to each model, vehicles cannot be built without them.
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As a result, world No. 2 automaker Volkwagen and rival BMW have cut output and temporarily closed some assembly lines, while Mercedes-Benz (MBGn.DE) has warned its production will be affected soon. read more
VW’s premium brand Audi said the entire Volkswagen group is working to get major suppliers to relocate their Ukrainian wire harness production to other plants, or find alternative suppliers. That search includes Eastern Europe, North Africa, Mexico and “possibly” China, it said.
“We have been working successfully with various suppliers from these regions for our models for years,” it said. “It is possible, for example, that suppliers will split production across several locations.”
BMW also said it is in “intensive talks” with suppliers to find alternative sources for parts, while world no. 4 carmaker Stellantis (STLA.MI) said it has already shifted its sourcing from Ukraine to elsewhere in Europe, declining to say where.
Nick Klein, a vice president at global logistics firm OEC Group, said carmakers who have relied on Ukraine will need to move fast.