Ukraine invasion hampers wire harness supplies for carmakers (updated)

Fujikura

02/03/2022 15:44

(Adds industry data, Volvo, Aston Martin comments, expert
comment)
    By Christina Amann and Nick Carey
    March 2 (Reuters) - Carmakers including Germany's Volkswagen
 VOWG_p.DE , BMW  BMWG.DE  and Porsche are struggling to obtain
crucial wire harnesses as suppliers in western Ukraine have been
shuttered by the Russian invasion, forcing them to curtail
production.
    Production of the part, needed for organizing miles of
vehicle cables, has affected suppliers like Leoni  LEOGn.DE ,
Fujikura  5803.T  and Nexans  NEXS.PA , and rippled through to
major carmakers.   
    Delivery bottlenecks have already hit some assembly plants
of world No. 2 automaker Volkwagen, while Porsche's luxury unit
has suspended production at its Leipzig plant.  urn:newsml:reuters.com:*:nS8N2QT0AJ
 urn:newsml:reuters.com:*:nL8N2V5396 
    Rival BMW has also been affected.
    "Due to supply bottlenecks, interruptions to our production
will occur," BMW said in a statement. "We are in intensive
discussions with our suppliers."
    A wire harness is a vital set of parts which neatly bundle
up to 5 kilometres (3.1 miles) of cables in the average car.
Unique to each car model, vehicles cannot be built without them.
    Suppliers like Leoni, which has two wire harness factories
in western Ukraine, are scrambling to "compensate for production
losses" and "interruptions in our two plants in Stryi and
Kolomyja, triggered by the Russian war of aggression against
Ukraine," Leoni said in a 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 hefty
wire harness production sector in Ukraine, which has a
lower-cost, skilled work force. 
    According to an analysis of 2020 Comtrade data 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 22 automotive companies
have invested more than $600 million in 38 plants - many, though
not all producing wire harnesses - employing over 60,000
Ukrainians.
    Those plants are close to car factories in Germany and the
low-cost manufacturing hubs that German carmakers in particular
have built in central Europe. 
    Sweden's Volco Cars 
 (Reporting by Nick Carey;
Editing by Bernadette Baum and Nick Zieminski)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))