The Russian invasion of Ukraine is having an effect on automotive supply chains.
Reuters reports BMW and Porsche have been forced to pause production due to a shortage of wiring harnesses.
BMW and the Volkswagen Group source the harnesses from suppliers in western Ukraine, and are among several car companies that have reportedly set up “crisis teams” to manage the disruption to operations caused by the invasion.
“The Volkswagen Group is looking at the situation in Ukraine with great concern and consternation,” said a spokesperson for Porsche.
BMW is pausing production at its Munich and Dingolfing plants in Germany, plus its engine factory in Steyr, Austria and the Mini factory in Oxford, England.
Its plants in China, the USA, and Mexico are reportedly unaffected as they use different suppliers.
BMW will also adjust production shifts at its Leipzig and Regensburg plants in Germany. It’s stopping production at its Kaliningrad plant in Russia.
Several carmakers source wiring harnesses from suppliers such as Leoni, Fujikura and Nexans in Ukraine, due to the country’s geographic proximity to their factories, plus its lower labour costs and skilled workforce.
Reuters reports harnesses are the most critical automotive component exported to the European Union from Ukraine, accounting for nearly seven per cent of all imports of this product.
Wiring harnesses bundle up to 5km of cables in the average car, and are unique to a vehicle model. It could take months for suppliers to increase production capacity at other locations.
German company Leoni has two factories producing wiring harnesses in western Ukraine, and though much of the conflict has been occurring in the northern, eastern and southern parts of the country, it says the “chaotic situation at the border points with the EU” is posing a challenge.
The imposition of sanctions on Russia has also forced car companies to suspend their operations there, including Ford and General Motors, while Renault’s stock prices have plunged 37 per cent since February 16.
Renault’s second-largest market is Russia as it owns AvtoVaz, which builds Lada-branded vehicles.
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