BMW and VW warn of component shortage in Ukraine

LONDON (AP) — BMW and Volkswagen warned this week that Russia's invasion of Ukraine is creating a shortage of critical components, which has reduced vehicle production in Europe.

The two German automakers have pointed out that the war is having a “negative” effect on the industry's supply chain, which had beforehand been hit by a shortage of semiconductors.

BMW said on Wednesday that the bottleneck dealt with by its suppliers in Ukraine has forced the automaker to adjust or stop production in several of its factories, which is likely to have a negative impact on vehicle sales.

“Ukraine is, of course, home to many suppliers, so we too will have to face production interruptions and disruptions to the supply of important components,” said Maximilian Schoeberl, director of corporate affairs at BMW, in a webcast about the company's revenue.

Executives of both companies have said that there is a shortage of wiring harnesses, which are sets of electrical wires or cables that transmit signals or energy, due to the fact that their main suppliers are located in western Ukraine.

BMW explained that the war has forced its suppliers to reduce or suspend the production of wiring harnesses, which in turn forced the automotive company to reduce its own production. The company added that it is resuming production at two factories in Germany this week, and that its mini-factory in Oxford, England, is expected to do the same next week.

“But what is clear is that the situation will continue to be volatile,” Schoeberl said.

Nicolas Peter, BMW's chief financial officer, said that commodity prices are expected to count the company hundreds of millions of euros. The invasion of Ukraine triggered commodity prices over concerns that it would restrict supplies from Russia, a major producer of metals such as nickel and palladium used in automobile production.

Volkswagen added that it is also taking some of the vehicle production out of Europe and directing it to other regions, such as China and South America.