Cascade of production stoppages in car factories across Europe

Ukraine is one of the leading manufacturers of vehicle wiring harnesses. Russia’s military invasion has abruptly dented production at plants in the west of the country, immediately leading to heightened supply chain tensions for the industry. Problems that started with the pandemic and the subsequent industrial reactivation, with the shortage of semiconductors (chips)delays in deliveries or the very strong inflationary scale of raw materials.

Audi factories in Ingolstadt and Neckarsulm in Germany have already announced production stops, which will last until March 18. Ukraine is also a net supplier of materials such as palladium and platinum, which are used for catalytic converters. So, Apart from the well-known global mismatch with microchips, the war will increase stoppages in factories throughout Europe. Announced and those to come. In Spain, Stellantis Vigo is just one of them. The factory communicated this Friday to the works council that it will stop its production completely for the next week. Forecasts point to activity starting once more in both systems on March 14 at 06:00. In his case, once more, it is the disruptions in chip supply that have forced this decision. It has also had to postpone the reactivation of the fourth shift of System 2 (light commercial vehicles), initially scheduled for April and which will have a team of almost 700 workers. The company might not specify how long this delay will be, although sources consulted point to the month of June as the most likely date.. Everything will depend, they added, on how the supply of semiconductors and the automobile market evolves, also waiting for the possible impact of the war in Ukraine on the economy in general.

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Announcements like the one from the Galician factory have followed one another in a cascade in the last few hours. Mercedes-Benz announced a reduction in production at its European plants, and that it will adjust shifts to avoid complete stoppages in its systems. Porsche has suspended, for its part, the production of its Macan and Panamera models at the Leipzig factory. The German manufacturers’ association, VDA (Verband der Automobilindustrie), warned that the Russian invasion is already being perceived in the transportation routes, as well as in financial transactions, and that they are preparing for shortages of a variety of raw materials. In a statement, he noted that the conflict’s impact on maritime, rail and air transport was exacerbating supply chain problems at a time when inventory levels were already low.

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