DETROIT. Audi expects the war in Ukraine will cause a “huge disruption” to the global supply chain, an executive from the German luxury brand said Thursday.
The comments come as automakers around the world, including Audi and its parent company Volkswagen, struggle to maintain supply chains for critical war-affected parts such as semiconductor chips and wiring harnesses.
Automakers warn that this year the conflict creates extreme uncertainty about car production, sales and financial forecasts.
“We are going to see huge interference in all supply chains, not just in chip production, but in any supply chains internationally,” Hildegard Wortmann, head of sales and marketing for the car company, said during a media roundtable on Thursday. “The implications of this will be huge for the entire supply situation.”
Although Russia and Ukraine account for a small amount of global automotive production, they supply key raw materials for the production of semiconductor chips, which have been in short supply for more than a year due to disruptions caused by the coronavirus pandemic. Ukraine is also a major supplier of wire harnesses and other materials, mainly to European automakers.
Wortmann said that in addition to the wiring harnesses that are used in vehicles to supply electricity and communicate between parts, the automaker also sourced seat fabrics from the country.
Audi on Thursday said it was adjusting production at its Hungarian plant due to supply chain issues, Reuters reported. Other automakers such as Mercedes-Benz and BMW have announced adjustments or production cuts due to the war.
Wortmann declined to predict how the war would affect the company’s sales in 2022, citing the instability of the situation.
S&P Global Mobility, formerly known as IHS Markit, on Wednesday lowered its forecast for global light vehicle production for 2022 and 2023 by 2.6 million units for both years, to 81.6 million units for 2022 and 88.5 million units for 2022. 2023 due to war.
According to S&P, about 45% of wire harnesses produced in Ukraine are typically exported to Germany and Poland, which puts German automakers in a vulnerable position.