Challenges surround the German auto industry

The conflict in Ukraine, along with Western sanctions against Russia, continue to create significant challenges for the global economy, especially in Europe.

Last week, Volkswagen – the manufacturer car Germany’s largest vehicle, had to suspend production of electric vehicle lines at its factory in Zwickau, due to a lack of components from Ukraine. This is considered the first “victim” from the Ukraine conflict in the German auto industry. After that, many other factories and manufacturers also started having similar trouble.

“The direct impact of the conflict is real and is becoming increasingly apparent. Volkswagen, BMW or Audi have all begun to experience production disruptions,” said Stefan Bratzel, director of the CAM Automotive Research Institute. said.

Workers at the Volkswagen car factory in Wolfsburg, Germany. (Photo: Reuters)

Along with the conflict and sanctions against Russia, the supply of components from Russia and Ukraine has fallen into a state of freeze. In addition, the congested international transport routes also cause more delays in the supply chains of manufacturers. Even their main factories are in the process of having to suspend production this week.

“We’re a global manufacturer, using materials from around the world, so these issues are completely understandable. It can happen to us or any manufacturer,” he said. Dirk Mueller, Volkswagen automaker, said.

If the conflict continues to escalate, then diversification of supply is essential for automakers. However, this is not an easy choice.

“In the long term, manufacturers will have to turn to other suppliers, from other regions. However, this also means that supply shortages can persist for many months,” said Stefan Bratzel. Director of CAM Automotive Research Institute, added.

The Russia-Ukraine conflict is the latest challenge facing German carmakers, after two difficult years due to the pandemic as well as chip shortages. With the current situation, the prospect of recovery is becoming more and more dim.

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