Automakers including Germany’s Volkswagen, BMW and Porsche are struggling to secure critical wiring harnesses as suppliers in western Ukraine have been shut down by the Russian invasion, forcing them to curtail production.
Production of the part needed to organize miles of vehicle cables has impacted suppliers such as Leoni, Fujikura and Nexans and has penetrated major automakers.
Delivery bottlenecks have already hit some assembly plants of the No. 2 car maker Volkwagen, while Porsche’s luxury unit has halted production at its Leipzig plant.
Rival BMW is also affected.
“Due to supply bottlenecks, there will be interruptions in our production,” BMW said in a statement. “We are in intensive discussions with our suppliers.”
Wiring harnesses are vital components that neatly bundle up to 5 kilometers (3.1 miles) of cables in the average car. Unique to any car model, vehicles cannot be built without them.
Suppliers such as Leoni, which has two wire harness plants in western Ukraine, are making efforts to “compensate for production losses” and “breakdowns at our two plants in Stryi and Kolomyja caused by the Russian war of aggression against Ukraine,” Leoni said in a statement. statement.
Leoni said it had formed a task force to evaluate developments.
Suppliers, including Germany’s Forschner, Kromberg & Schubert, Prettl, SEBN and Japan’s Yazaki, have built up a sizeable wire harness manufacturing sector in Ukraine with a cheaper, skilled workforce.
According to an analysis of Comtrade data for 2020 by consultancy AlixPartners, wire harnesses were Ukraine’s most critical automotive component exported to the European Union, accounting for nearly 7% of all imports of this product.
Ukrainian government figures show that 22 auto companies have invested more than $600 million in 38 factories — many, but not all of which produce wire harnesses — employing more than 60,000 Ukrainians.
Those plants are close to car factories in Germany and the low-cost production centers that German car manufacturers in particular have built in Central Europe.
“In cases like this where the problem isn’t likely to go away anytime soon, automakers will have to look for short- and medium-term alternative solutions,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
It can take months for suppliers to increase capacity in other locations, requiring factory space, machinery and tools, employees and financing.
Before the invasion, auto parts maker Aptiv Plc spent months doing just that — moving high-volume production of vehicle parts from its two plants in Ukraine ahead of potential hostilities, the company’s CEO said last week.