“The war in Ukraine has led to plant closures across Germany and a likely loss of around 150k units in March alone,” James Norris, Senior Analyst, European Light Vehicle Production at the respected LMC Automotive consultancy said today.
By the beginning of March this year, following Russia’s invasion of Ukraine, almost all automotive production in the two warring countries had come to a complete standstill. The problem for German automakers is that are dependent on Eastern European suppliers, including Ukraine.
Morris said, “In normal times, Russia is the third-largest European Light Vehicle producer (behind Germany and Spain), manufacturing just under 1.5 million units in 2021. So, closures on the current scale (amounting to over 90% of the country’s Light Vehicle capacity) are having a profound impact on regional volumes. Disruption in Ukraine, with its small Light Vehicle assembly operation – just 7,000 units were built last year – has only a limited regional volume impact.
Overall, shortages of components sourced from Russia and Ukraine are affecting manufacturing in other markets across the region with no end in sight. However, the chart below shows announced plant closures in Europe (excluding Russia and Ukraine) due to the war. “It is striking that most shutdowns are in plants operated by German OEMs. In March alone, OEM announcements and our estimates lead us to believe that German automakers will lose just under 150,000 units of output (against our volume benchmark),” said Morris.
He is optimistic though, noting resourcing is actively being pursued, notably at the VW Group, the automaker arguably hurt the most. VW is increasingly “sourcing affected components from plants in Romania and Hungary, as well as some from outside of Europe to offset the shortfall in Ukraine.”
Moreover, “Ukrainian suppliers are continuing to produce in small volumes, although the sustainability of this supply remains a risk. Nevertheless, the disruption to German output due to wiring harness shortages seems increasingly likely to recede in April,” Morris said.
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About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
German Automakers Bearing Brunt of Putin’s War on Ukraine
“The war in Ukraine has led to plant closures across Germany and a likely loss of around 150k units in March alone,” James Norris, Senior Analyst, European Light Vehicle Production at the respected LMC Automotive consultancy said today.
By the beginning of March this year, following Russia’s invasion of Ukraine, almost all automotive production in the two warring countries had come to a complete standstill. The problem for German automakers is that are dependent on Eastern European suppliers, including Ukraine.
Morris said, “In normal times, Russia is the third-largest European Light Vehicle producer (behind Germany and Spain), manufacturing just under 1.5 million units in 2021. So, closures on the current scale (amounting to over 90% of the country’s Light Vehicle capacity) are having a profound impact on regional volumes. Disruption in Ukraine, with its small Light Vehicle assembly operation – just 7,000 units were built last year – has only a limited regional volume impact.
Moreover, “Ukrainian suppliers are continuing to produce in small volumes, although the sustainability of this supply remains a risk. Nevertheless, the disruption to German output due to wiring harness shortages seems increasingly likely to recede in April,” Morris said.
AutoInformed.com on
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.