Compiled / Zhu Lin
Editor/ Wu Jing
Design / Zhao Haoran
Source: FinancialTimes, AutoCar, Autonews, by Joe Miller, Jack Warrick, Autonews Staff
Herbert Diess, chief executive of Volkswagen Group, Europe's largest automaker, warned that the protracted war between Russia and Ukraine could have had a "worse impact" on the region's economy than the coronavirus pandemic.
Dees told the Financial Times that disruptions in global supply chains "could lead to huge price increases, energy scarcity and inflation, which could be very dangerous for the European and German economies".
Dis's warning comes at a time when Western countries are stepping up their efforts to punish Russia economically. Russia is a major global supplier of commodities from natural gas to palladium.
The sanctions imposed on Russia by Western countries so far, and the expectation that Russia could retaliate by shutting down gas supplies to Europe, have thrown international energy markets into turmoil.
"The threat of this war to Germany and Europe is enormous," Dies said. He noted that more severe inflation could severely erode consumers' purchasing power.
Inflation in the euro area hit a new record of 5.8% in February and is expected to rise to 7% in 2022. Faced with the dual threat of rising prices and slowing economic growth, the ECB met on March 10.
Europe's greater reliance on Russia's energy needs has led to a divergence in energy sanctions, with Germany choosing not to follow the United States in imposing a sweeping oil and gas embargo. Russia supplies Europe with 45 percent of its natural gas imports, which power both home heating and the continent's manufacturing sector.
"For a society like Germany that relies on Russian energy and raw materials ... If you imagine us severing our commercial ties with Russia, if this conflict (doesn't stop) we may have to do this, you can no longer buy energy, which will lead to a situation that could have a significant impact on Europe and Germany. ”
Dies stressed that he was in favor of "maximum sanctions", but once these sanctions are in place, "we have to go back to negotiations, back to dialogue, because we don't want endless wars in Ukraine".
Volkswagen, Porsche and Skoda
The Volkswagen Group, which employs 500,000 people in Europe, announced on March 3 that it would stop production in Russia "until further notice."
Due to a shortage of components produced in Ukraine, the Volkswagen Group was forced to suspend production at its German plant on March 7. This echoes the disruption to supply chains at the start of the COVID-19 pandemic in 2020.
Diess warned that Volkswagen and the wider European economy could soon face problems much larger than supply bottlenecks caused by the pandemic. Commenting on the chip shortage that has plagued the automaker for more than a year, Diess said: "We are concerned about semiconductors, covid-19 and other issues... Handled very well. ”
Due to the shortage of wiring harnesses produced in Ukraine, some plants in Audi and Porsche are facing production cuts and production stoppages, and the shutdown time has also been extended from one week to two weeks.
Skoda also had to cut production due to supply shortages, which limited production of Enyaq electric SUVs.
The Czech company owned by Volkswagen said: "Due to the current situation in Ukraine, Skoda Motors is facing a serious shortage of spare parts supply from several local suppliers, which has affected some of our models. That's why we're limiting Enyaq iV production. ”
ŠKODA's supply chain consists of several suppliers located in western Ukraine. It also has two factories still in operation in Russia, with further disruptions to production expected. Russia is the second largest market for ŠKODA in 2021, with about 90,000 vehicles delivered.
"Sales strategies in Russia and Ukraine are currently the subject of intensive discussions. In light of recent developments, sales in both Ukraine and Russia are expected to decline. The company said.
Although Volkswagen has 7,000 employees in Russia, the market is not particularly important for its overall business. In 2021, Volkswagen and its other brands Skoda, Audi and Porsche will sell just over 204,000 vehicles in Russia, compared with 9 million globally.
BMW and Mercedes-Benz
Volkswagen's German rivals BMW and Mercedes-Benz also suspended production or sales in Russia.
The BMW Group has stopped producing BMW and MINI cars at several plants in Europe because parts cannot be delivered from Ukraine.
"The Russian-Ukrainian conflict has had a profound impact on the production of suppliers there, and the resulting shutdowns will lead to continuous production adjustments and interruptions at several BMW plants." A BMW spokesperson told the Frankfurter Allgemeine Zeitung.
The German newspaper also reported that BMW was considering alternative suppliers. One of its suppliers, German cable manufacturer Leoni, has two factories in Ukraine and employs about 7,000 people.
According to Automotive News Europe, production at BMW's plants in Munich and Dingolfin, Germany, and Oxford, UK, will be halted. Engine manufacturing in Steyr, Austria, will also be discontinued.
BMW will also halt exports to Russia and shut down its Kaliningrad plant, which produced 12,000 cars in 2021.
"Due to the current geopolitical situation, we will stop local production in Russia and stop exporting to the Russian market." BMW said in a statement.
Mercedes-Benz announced it will donate 1 million euros to support people affected by the crisis in Ukraine.
"As an urgent measure, we donated 1 million euros to the German Red Cross to help them help Ukraine." CEO Ola K llenius said.
Mercedes' commercial vehicle division, Daimler Trucks, which holds a 10 percent stake in Russian heavy-duty truck maker Kamas, has suspended operations in Russia. The German company said the parts it supplied to Camas were used exclusively for commercial vehicles, not military trucks.
Stellatis and Ferrari
Carlos Tavares, chief executive of Stellantis, has said that any decision the company will change its operations in Russia "depends a lot on what politicians are going to make."
"We want to be a compliant company," Tang said, "and we abide by the rules, laws and regulations in peacetime and sanctions in wartime." ”
On March 1, Stellantis set up a working group to monitor its 71 Ukrainian employees, and it now has another dedicated to "translating these hourly sanctions into business decisions."
Regarding the sanctions imposed by the West on Russia, Tang Weishi said: "So far, these sanctions are very targeted, but of course there will be a point in time when the factory cannot operate. ”
"We have a partnership with Mitsubishi in Kaluga, Russia, and as long as they have parts, these factories can run, and without parts, they can't run."
The Russian plant produces Citroën, Opel and Peugeot light commercial vehicles, and Stellantis is ready to start exporting these products to Western Europe.
Tang Weishi added: "It is important that we always focus on our employees, we represent citizens of 170 different countries in the company, we are the most diversified car company in the world. ”
Stellantis' Ferrari has suspended exports to Russia.
Ferrari CEO Benedetto Vigna said: "We are working with a number of agencies to play our small role in easing the situation. ”
Ferrari said: "Given the current situation, Ferrari has decided to suspend the production of cars for the Russian market until further notice. We continue to monitor the situation closely and will always respect all rules, regulations and sanctions. ”
On March 4, the company said its supply chain would not be affected because it did not import components from both countries. Ferrari also said Russia is a "small market" with only two dealers in the country, both based in Moscow.
Ferrari will also donate 1 million euros to support Ukrainians in need.
Scan the code to join the reader's WeChat group
Communicate about cars