By Christina Amann and Nick Carey
March 2 (Reuters) – Carmakers including Germany’s Volkswagen (VOWG_p.DE), BMW and Porsche are struggling to obtain crucial wire harnesses as suppliers in western Ukraine have been shuttered by the Russian invasion, forcing them to curtail production.
Production of the part, needed for organizing miles of vehicle cables, has affected suppliers like Leoni (LEOGn.DE), Fujikura (5803.T) and Nexans (NEXS.PA), and rippled through to major carmakers.
Rival BMW has also been affected.
“Due to supply bottlenecks, interruptions to our production will occur,” BMW said in a statement. “We are in intensive discussions with our suppliers.”
A wire harness is a vital set of parts which neatly bundle up to 5 kilometres (3.1 miles) of cables in the average car. Unique to each car model, vehicles cannot be built without them.
Leoni said it had formed a task force to evaluate developments.
Suppliers including Germany’s Forschner, Kromberg & Schubert, Prettl, SEBN and Japan’s Yazaki have built up a hefty wire harness production sector in Ukraine, which has a lower-cost, skilled work force.
Ukrainian government figures show 22 automotive companies have invested more than $600 million in 38 plants – many, though not all producing wire harnesses – employing over 60,000 Ukrainians.
Those plants are close to car factories in Germany and the low-cost manufacturing hubs that German carmakers in particular have built in central Europe.
Sweden’s Volvo Cars (AML.L) said they do not have harness suppliers in Ukraine.
“In cases like this where the issue is not likely to go away quickly, automakers will need to seek out alternative solutions for the short- and mid-terms,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
It could take months for suppliers to increase capacity at other locations – requiring factory space, machinery and tools, workers and financing.
Prior to the invasion, auto parts maker Aptiv Plc (APTV.N) spent months doing just that – shifting high-volume production of parts for vehicles out of its two plants in Ukraine ahead of possible hostilities, the company’s chief executive said last week. read more
