On March 7, the Economic Daily of Taiwan Province of China reported that due to the impact of the Russian-Ukrainian war, the factories of the world's largest automotive wiring harness manufacturer German LEONI in Ukraine and Russia have been suspended, which has greatly affected the company's supply to Volkswagen, BMW, Mercedes-Benz, Audi and other car manufacturers, and Taiwanese companies are expected to obtain a large number of transfer orders.
LEONI employs more than 86,000 people in 31 countries around the world, two factories in southwest Ukraine with 7,000 employees and two factories in Russia. At present, the Volkswagen Group's automotive wiring harness is close to running out, and its two factories have been down for several days, and more factories may be shut down in the future. BMW even said it was shutting down its largest plant in Europe or completely shutting down in the coming week.
So, will the lack of wiring harnesses cause the price of cars to increase? Xiao Lei believes that it is possible that the car factory will stop production for a week, which will bring a lot of losses to the enterprise. Manpower alone, manufacturers have to pay the whole factory a week's salary. Moreover, in the future, overtime rush will also pay additional overtime pay, which may be passed on to consumers.
However, even the price increase should not rise too much, or the price increase will not last too long. The last big price increase in the automotive industry was because of the chip shortage. There are only a few companies in the world that have the ability to produce chips on a large scale, and it takes a long time to build a chip manufacturing production line. As long as one has a major problem, it is difficult for the others to quickly make up for it.
Automotive wiring harnesses are relatively less technically difficult, and other companies can quickly provide similar products, and it is more convenient to expand production. Taiwan Guangyu, Trade Federation and other peer manufacturers should rapidly expand production capacity to meet the needs of European companies such as Volkswagen and Mercedes-Benz as soon as possible.
In this era, more and more companies may implement a multi-supplier strategy, spreading eggs in different baskets. Taking power batteries as an example, companies like Tesla will purchase batteries from the Ningde era, but its supply may still be Panasonic of Japan and LG Energy Solution of South Korea.
The competition between supply chain enterprises will not be limited to technology and supply capacity itself, and it is more difficult for a long-term monopoly of a certain enterprise in this industry. In the long run, each company will have its own focus on the technical direction, or more conducive to the innovation and development of the industry.