{"id":10619,"date":"2022-03-17T17:17:02","date_gmt":"2022-03-17T17:17:02","guid":{"rendered":"http:\/\/TheNextWeb=1382781"},"modified":"2022-03-17T17:17:02","modified_gmt":"2022-03-17T17:17:02","slug":"the-ukraine-war-has-massively-impacted-the-global-auto-industry","status":"publish","type":"post","link":"https:\/\/www.londonchiropracter.com\/?p=10619","title":{"rendered":"The Ukraine war has massively impacted the global auto industry"},"content":{"rendered":"\n<div><img decoding=\"async\" src=\"https:\/\/img-cdn.tnwcdn.com\/image\/shift?filter_last=1&amp;fit=1280%2C640&amp;url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2022%2F03%2FUntitled-design-65-2.jpg&amp;signature=238be589a1babdf2fd2b1bec891b5c33\" class=\"ff-og-image-inserted\"><\/div>\n<p>The Ukraine war has been slowly changing everything around us, causing ripple effects in the auto world as well.<\/p>\n<p>In fact, most key players across the automotive industry have taken decisive action or have been heavily impacted by Russia\u2019s invasion.<\/p>\n<p>So let\u2019s take a look at what\u2019s happening.<\/p>\n<h3>Suspension of business and halt of production<\/h3>\n<p>Following the imposed sanctions against Russia, <a href=\"https:\/\/techcrunch.com\/2022\/03\/03\/these-are-all-the-automakers-that-have-pulled-out-russian-operations\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">most automakers<\/a> have suspended vehicle exports to the country and frozen overall business activities.<\/p>\n<p>Among them, <a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/truck-maker-ab-volvo-halts-production-russia-spokesperson-2022-02-28\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Volvo<\/a>, <a href=\"https:\/\/twitter.com\/VWGroup\/status\/1499331270056239105\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Volkswagen<\/a>, <a href=\"https:\/\/www.reuters.com\/business\/autos-transportation\/bmw-halts-export-cars-russia-expects-production-interruptions-2022-03-01\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">BMW<\/a>, and <a href=\"https:\/\/global.toyota\/en\/newsroom\/corporate\/36979255.html\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Toyota<\/a> have also stopped production at their Russian facilities either in alignment with the sanctions (as is the case with the first three OEMs), or due to supply chain disruptions (as is the case with Toyota).<\/p>\n<p>Notably, parts shortage and supply problems have expanded the <a href=\"https:\/\/www.nytimes.com\/2022\/03\/01\/business\/volkswagen-bmw-autos-germany-ukraine.html\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">halt of production beyond Russia<\/a>. Among them:<\/p>\n<ul>\n<li>Volkswagen is slowing production at its main factory in Wolfsburg and several other Germanplants.<\/li>\n<li>BMW is facing production problems at its factories in Germany, Austria, and the UK.<\/li>\n<li>Porsche\u2019s production will stop at its Leipzig plant.<\/li>\n<\/ul>\n<h3>Parts shortage and supply disruptions<\/h3>\n<p>The Ukraine crisis has deteriorated even more the already pandemic-strained global supply chain.<\/p>\n<p>On top of the <a href=\"https:\/\/thenextweb.com\/news\/buying-a-new-car-maybe-wait-for-the-chip-shortage-to-end-first\" target=\"_blank\" rel=\"noopener noreferrer\">semiconductor shortage<\/a>, automakers are now facing the lack of other critical components, such as wire harnesses, neon gas, and palladium.<\/p>\n<p>Ukraine is one of Europe\u2019s main wire harness suppliers, <a href=\"https:\/\/www.ft.com\/content\/1d0522d0-5bb2-4c49-8978-6fb99fec7e24\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">accounting for one fifth of the total supply<\/a>. The component is necessary for the vehicles\u2019 electronic parts and a fundamental step of the assembling process \u2014 as a result of the invasion, the Ukrainian plants manufacturing it are now closed.<\/p>\n<p>The US is going to be hit hardest by the neon gas shortage. The country\u2019s neon supply, which is used among others for chip production, comes almost entirely from Ukraine and Russia, according to <a href=\"https:\/\/techcet.com\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Techcet<\/a>, a market research firm that specializes in critical supply chain materials and components.<\/p>\n<p>The firm also estimates that Russia supplies about 33% of the global demand for palladium \u2014 a metal necessary for semiconductor chips.<\/p>\n<h3>Rising prices of raw materials and inflation<\/h3>\n<p>Apart from palladium, Russia is a significant supplier of other automotive-grade metals: aluminum and nickel \u2014 the last one being a key element of EV batteries.<\/p>\n<p>Following the sanctions, <a href=\"https:\/\/www.reuters.com\/markets\/europe\/russia-disruptions-fuel-nickels-30-spike-15-year-high-2022-03-07\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">nickel prices skyrocketed 90%<\/a> to an all-time high on March 7, while <a href=\"https:\/\/www.reuters.com\/markets\/europe\/russia-disruptions-fuel-nickels-30-spike-15-year-high-2022-03-07\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">aluminum jumped to a record of $4,000 per ton<\/a> due to growing fears of supply disruptions.<\/p>\n<p>And it\u2019s highly likely that automakers will pass on the increased costs to consumers.<\/p>\n<p>\u201cWith prices for oil and gas, along with commodities like metals used to build vehicles, soaring due to Russia\u2019s invasion of Ukraine, automakers may be compelled to try to offset their increasing costs by raising vehicle prices,\u201d Michelle Krebs, executive analyst at Cox Automotive, <a href=\"https:\/\/www.coxautoinc.com\/market-insights\/kbb-atp-february-2022\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">explains<\/a>.<\/p>\n<h3>A pessimistic global market outlook<\/h3>\n<p>Research firm <a href=\"https:\/\/ihsmarkit.com\/index.html\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">IHS Markit<\/a> expects the global impact this year to be about 3.5 million fewer vehicles in connection to semiconductor chip constraints \u2014 both associated with the shortage in neon gas and palladium.<\/p>\n<p>Based on the current situation, European automakers (many of whom are facing production halts, as described above) are suffering the biggest blow, while we can expect that the US market will be significantly hit as well.<\/p>\n<p>On the contrary, the Chinese auto market could remain unaffected, as the country hasn\u2019t yet imposed any sanctions against Russia and doesn\u2019t wish to be part of the Ukraine crisis.<\/p>\n<p> <a href=\"https:\/\/thenextweb.com\/news\/ukraine-war-has-massively-impacted-global-auto-industry\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ukraine war has been slowly changing everything around us, causing ripple effects in the auto world as well. In fact, most key players across the automotive industry have taken decisive action&#8230;<\/p>\n","protected":false},"author":1,"featured_media":10620,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/10619"}],"collection":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10619"}],"version-history":[{"count":0,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/10619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/media\/10620"}],"wp:attachment":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}