Auto giant Volkswagen has been forced to stop production at two of its plants in Germany after difficulty obtaining parts from a supplier based in Ukraine. The German carmaker's factory in Zwickau will grind to a standstill for four days next week after Volkswagen could not get its hands on electrical wires from its Ukraine-based manufacturer.
Volkswagen's Dresden plant, located around 80 miles away from Zwickau, will also halt production for three days next week because of supply chain issues brought upon by Russia's invasion of Ukraine.
Volkswagen has not named the supplier affected by the worsening conflict, but the German firm is now "reviewing alternatives" to address the parts shortage. This is another damaging blow to Volkswagen, which was also forced to slow down its vehicle production last year due to supply chain issues, including the ongoing global semiconductor shortage.
The majority of factories in Ukraine have been closed this week following Russia's deadly attack on the country, which has seen civilians take up arms to protect their home nation. The unfortunate developments in Ukraine have a brutal effect on Volkswagen, with the German auto manufacturer producing around 1,200 fewer cars every day. Among the vehicles affected by the sudden closure of plants are the ID models assembled in the Zwickau facility.
Volkswagen CEO Herbert Diess issued a statement regarding the conflict, saying it was "too early to assess the impact" of the war in Ukraine on his company. Diess added that Volkswagen offered to fly its Ukraine-based staff out of the country a few weeks ago before the war started.
As per Hindustan Times, Renault was also affected by the conflict with the French automaker suspending some operations at its Russian car assembly plants for the next few weeks because of parts shortages. A company spokeswoman revealed that the temporary closure of its facilities there is because of the reinforced borders between Russia and its neighboring nations, with Renault having difficulty getting the necessary parts.
Russian automaker Avtovaz, which Renault Group controls, could also halt production at its plant in central Russia for one day because of a shortage of components as well.
Consulting firms LMC Automotive and JD Power slashed their global new-car sales outlook for this year by 400,000 vehicles following Russia's invasion of Ukraine, setting their new target figures at 85.8 million units. They cut their forecast because of rising aluminum and oil prices that could discourage prospective buyers from spending on new vehicles.
According to Jeff Schuster, president of Americas operations and global vehicle forecasts at LMC Automotive, "the prices and supply of vehicles across the globe will be under added pressure based on the severity and duration of the conflict in Ukraine."
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