"The situation in Ukraine has left a big question mark for German car companies."
According to the Global Times, although the current global epidemic situation is easing and the problem of chip shortage has improved, the russian-Ukrainian conflict that has not seen the end is making many large car manufacturers distressed, and there have been different degrees of production cuts and supply cuts, and a series of European car companies such as Volkswagen, BMW, and Mercedes have been deeply affected.
Deutsche Bank experts expect that by the end of June this year, production of as many as 1.5 million vehicles may be blocked due to a lack of equipment components. To avoid a worsening of the situation, German car giant Volkswagen made a decision.
Volkswagen said that due to chip supply shortages, supply chain instability and rising raw material prices, as well as the Conflict between Russia and Ukraine, the automotive industry is facing difficulties at the moment, and the company's business this year may be affected. In view of this situation, Volkswagen is considering transferring part of its production in Europe to factories in China and the Americas.
Not long ago, Volkswagen announced its 2021 results, and shipments hit a new low in nearly 10 years, only 8.6 million units, but sales increased by 12% to more than 250 billion euros, and operating profit doubled from 2020 to 20.1 billion euros. Volkswagen believes that sales will increase by 5% to 10% in fiscal 2022, and sales will increase further by 8% to 13%. But apparently the impact of the Russian-Ukrainian conflict was not anticipated, and the president of Volkswagen said that the impact was greater than the epidemic.
The first is supply chain disruptions, especially cable and interior components from Ukraine, which can lead to difficulties in the delivery of new cars. Volkswagen is currently restructuring its supply chain, with plants in Places like Zwickau, Germany, temporarily shutting down, and factories in Poland, the Czech Republic, and Slovakia being forced to stop production or reduce production. If other countries and regions are unable to fill the gap in The supply of components in Ukraine in the next month, Volkswagen will have to revise its business forecast for this year.
Secondly, the price of raw materials soared, palladium and nickel supplied by Russia are the main raw materials for exhaust gas purification devices and batteries, if the price of raw materials cannot be absorbed by reducing costs, the cost will be passed on to the price of the car, and with the rise in gasoline and electricity prices, the consumer's desire to buy a new car will also be reduced. Finally, if the war and price increases continue for a long time, it will also have a greater impact on the psychology of consumers.
Volkswagen plans to transfer part of its production capacity to China, and there are also certain considerations. There are many wiring harness manufacturers in China, which can effectively alleviate the public's demand for wiring harnesses. It is worth mentioning that Volkswagen's factory in Anhui will also start production in 2023, which means that Volkswagen will produce a large number of electric vehicles in China, which will not only help Volkswagen recover production capacity, but also promote the development of China's new energy automobile industry.