Car plants across Europe are closing for a five euro piece. Its biggest supplier is Ukraine.

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We are seeing the implications of the war that Russia and Ukraine are waging on a daily basis. In the automobile sector, we have already talked about how a disproportionate increase in the prices of raw materials could affect or how a possible European veto on Russian oil would affect. this time it is Wayne Griffiths, CEO of Seatwho has confirmed the problems facing the brand.

In an interview with La Vanguardia, Griffiths confirmed that “missing engines for plug-in hybrids, which we were selling a lot under the Cupra brand like the Formentor, which is very popular in Germany. We may have to stop production or reduce shifts, we have to be very flexible.”

The situation is such that the CEO of Seat encourages us to rethink the direction of the entire supply chain and reduce Europe’s dependence on Asia in terms of semiconductors and metals such as nickel, aluminum or palladium. “It doesn’t make sense that save 5 euros in a piece then you have to stop the factory and lose the sale of a car that gives you a turnover of 30,000 euros,” he says in the interview.

A broken chain for the Volkswagen Group

In the case of Seat, the firm has had to lower the production of plug-in hybrids because no components enough to equip the units that leave the factory with an engine. They are missing harnesses from Eastern Europe that Griffiths says they can replace with new suppliers from North Africa. They are pieces that bundle up to 5 kilometers of cablesthe average of these components that we find in new vehicles, and that the main suppliers of German vehicles have in Ukraine.

This situation has caused a bottleneck that has stopped the production of some vehicles, as these cable harnesses cannot be obtained in the same quantity from other suppliers in a short space of time. All this has led to the Cupra Born, the brand’s first electric car, having had to see its manufacturing slow down due to the closure of the Zwickau plant (Germany), where supplies do not arrive from Ukraine.

It is not the only case in the Volkswagen Group. Audi is currently shutting down the Ingolstadt plant and the Neckarsulm plant (both in Germany) is undergoing a closure that will last until March 18. Porsche has reduced the volume of production of the Panamera and the Macan and has had to stop the Taycan. Volkswagen is experiencing this same situation with the ID.3 and is replacing Ukrainian suppliers with others located in Morocco, Tunisia, Serbia and Romania, reports Automotive and Sport.

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Beyond the delays

All these problems, which Hyundai, Toyota or the Stellantis Group are also facing, who have had to stop their factories on Russian soil due to lack of components, among others, adds to a highly pressured raw material market.

Russia is a major supplier of metals used in the automobile industry and companies are moving away from the market, with the aim of reducing a dependency that would be fatal if European and US sanctions they expand.

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As a consequence, the market is smaller and prices rise. Not only for manufacturers, but also for buyers. Reuters reports that in February the median purchase price of a vehicle in the United States It was 44,460 dollars (42,242.97 euros), 18.5% more than in the same month of 2021.

In Reuters they collect the words of Chris Blasi, executive director of the distributor of precious metals Neptune Global, who has warned that “either consumers will pay more for cars, or manufacturers will have to find cost savings elsewhere if they don’t want to pass them on.” Palladium is one of those precious and essential metals for new vehicles. In December 2021 you could buy an ounce at $1,940, this week it reached $3,340 (1,077 and 3,024 euros, respectively).

We are seeing the implications of the war that Russia and Ukraine are waging on a daily basis. In the…

We are seeing the implications of the war that Russia and Ukraine are waging on a daily basis. In the…

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