Putin sparks EU panic as shortage of key materials force car plants to SHUT DOWN

Ukraine: Robert Jenrick thinks Russian army on verge of collapse

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Car manufacturers in Europe may be the latest casualty of Russian President Vladimir Putin’s war in Ukraine. Many car factories, which were already dealing with the impacts of the pandemic and global chip shortages, may be forced to close down. Ukraine is a major exporter of wire harnesses, which are about 5km of an organised set of wires, terminals and connectors.

These harnesses run throughout the car and are responsible for relaying information and electric power.

The besieged country currently accounts for 7 to 11 percent of all imported wire harnesses into the EU.

Given fears for months that Putin would invade Ukraine, European car manufacturers already searching for alternatives.

However, experts believe that this transition will take months before it’s full brought up to scale.

As fighting ceased production at Ukrainian car factories, the knock-on effect was almost immediate.

Cars cannot operate without wiring systems, which are often tailor-made to specific vehicles and manage miles of cables.

The wiring harnesses are among the first components to be installed in any new vehicle, and without them, assembly lines are brought to a standstill.

Speaking to EURACTIV, the European Association of Automotive Suppliers (CLEPA) noted that it is likely to take between three and six months before alternative sourcing comes from Northern Africa (Morocco and Tunisia) as well as the Western Balkans (Serbia and North Macedonia) is fully scaled up.

At the moment, there are seven European suppliers in Ukraine, meanwhile, more than 30 European suppliers have facilities in Russia.

CLEPA warned that other issues plaguing the industry, like the global chip shortage, will only get worse.

CLEPA said: “If the conflict is not resolved in the near future, we can expect the chip shortage to only get worse.

“Supply of critical raw materials and rising energy prices will also have a huge impact.”

Carmakers in the EU are already feeling the effects of the shortage.

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According to local reports, Audi’s factory in Hungary is facing severe shortages of spare parts.

According to EURACTIV, the company plans to hold a press conference today where “directors will provide further details on the current situation”.

In Slovakia, Patrik Križanský from the Slovak electric vehicle association said, “Currently, basically all critical materials we need for the production of batteries are breaking records in terms of price.

“Lithium is up 100% in comparison with January, same with cobalt or nickel.

“Nickel is mostly imported from Russia, it holds 10% of world reserves, and we must accept that any sanction will affect the imports and the price.”

Meanwhile, a Renault factory in Cléon, France, was put into short-time working due to a lack of components.

Union workers directly blamed the invasion of Ukraine for this slowdown of production.

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