Russia’s invasion of Ukraine is drawing attention from all over the world, but it is also being carefully watched by the automobile industry.
During the first few days of the war, the fate of mines needed by the Russian automotive industry, such as nickel and palladium, became a matter of curiosity, but the Ukrainian factory, which stopped production on the last day, is under close scrutiny. It is in.
Stopping production at Ukrainian cable-producing plants could pose a new crisis for the automotive industry, resulting in a loss of up to 15% in the European automotive industry in the first half of this year. It is stated that there is.
Wells Fargo analyst Colin Langan said a shut-down Ukrainian facility could threaten the automotive industry for cables used in automotive electrical equipment, and sector development could lead to sector production. In the first half of this year, it said it could reduce the number of vehicles increased by 700,000.
German car makers Volkswagen and BMW have announced that they have stopped production at their German plant due to supply chain disruptions.
VW CEO Herbert Diess warned that the year-end forecast could be updated if the cable needs cannot be met in the coming weeks. Due to the turmoil in the European supply chain, VW is expected to send up to 100,000 vehicles to its plants in China and the United States for assembly.
Another German Mercedes announced that it had reduced production in Germany and Hungary due to the same problem.
17 factories were produced
Seventeen cable factories in Ukraine produced before the war. According to Wells Fargo, the country ranks third in production after Romania and Morocco.
Leoni, a German supplier that operates two factories in the country, employed 7,000 people in the Russian-occupied western Ukraine. The German company renewed expectations for development and said it would experience a decline in both production and profits at the end of 2022.
The company’s statement that it cannot make up for production losses until the end of the year can be interpreted as a sign that a new crisis in the automotive industry will continue until next year. On the other hand, it should be noted that Leoni plans to double its production capacity outside Ukraine. However, the above capacity increase is expected to take at least 3 months.
The chip crisis in the automotive industry, which has been going on for over a year, has caused supply problems around the world, but if the war causes a cable crisis, the industry is wondering how to deal with the new crisis. ..
An important part of the raw material is in Russia
On the other hand, the fact that Russia is an important mining producer for the automotive sector could pose a new crisis for this sector.
Russia, the world’s third-largest supplier of nickel for lithium-ion batteries used in electric vehicles, also manufactures catalytic converters for automobiles equipped with internal combustion engines. We provide 40 percent of palladium to the world.
As war and mutual sanctions continue and automakers become more difficult to access the mine, the sector is likely to incur new losses.
In addition, the fact that Russia is a production base and an important market shows the potential losses in the automotive sector during the year.like that Stellantis, Volkswagen, Toyota, Hyundai, Renault Global automotive organizations such as Russia have been producing for many years.
Russia’s car market is 1.67 million, with total car production rising 9.1% last year to 1.56 million, more than in all European countries except Germany, France, the United Kingdom and Italy. It is attracting attention for that. However, the suspension of both domestic production and sales of automobiles by Western manufacturers stands in front of us as a development that could cause the automobile sector to shrink.
The price is rising
This trend is also reflected in the rise in car prices. After US electric car maker Tesla raised prices the day before, Chinese electric car maker BYD also announced that it has raised the price of cars.
BYD’s statement cited rising raw material prices as the reason for the price hike.
Tesla was raising car prices in both the US and China the day before, and the company’s CEO, Elon Musk, announced that they were experiencing raw material and logistics issues.