The consequences of the war on the automobile industry

Times of war are always devastating; we all witness horrific stories and scenes. In this context, reactions to the invasion of Ukraine are appearing all over the world. And the automobile industry is not staying out of this.  

Volkswagen Group announced that it will donate 1 million euros to the United Nations refugee relief agency in Germany. Tesla also made a statement about freebies at its Supercharger stations in Poland, Slovakia, and Hungary.  

Volvo suspended exports to Russia and retaliated against the military operation. General Motors and Renault have also halted sales to the Eurasian giant until news of the war’s end.  

How much automobile production will it feel?  

On German territory, Volkswagen will have to stop production at two electric vehicle plants because it can no longer get parts from Ukraine. More disruptions are expected in the automotive supply chain as there are more than 40,000 suppliers worldwide and some of them are in Western Ukraine.  

Renault will also suspend production temporarily in Russia, there are disruptions in the supply of components. All kinds of work are halted until Saturday. The need for stricter controls at the countries’ borders and heavy traffic on some routes forces logistics to be rethought.   

There are also serious production problems in the East. Toyota will shut down production at 14 plants in Japan due to a systemic failure with a domestic supplier. The loss will be 13,000 vehicles per day of downtime.   

There is no indication yet that what happened in Japan is related to the war in Ukraine, but the outage is suspicious and under internal investigation. The event occurred shortly after Japan joined the West in sanctions against Russia, however, there is no certainty.  

The Future of the Supply Chain  

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