Russia's devastating war on Ukraine is bringing a whole set of new problems to the global auto industry.
CHICAGO -- BMW has halted production at two German factories. Mercedes is slowing work at its assembly plants. Volkswagen, warning of production stoppages, is looking for alternative sources for parts.For more than a year, the global auto industry has struggled with a disastrous shortage of computer chips and other vital parts that has shrunk production, slowed deliveries and sent prices for new and used cars soaring beyond reach for millions of consumers.
In the United States, the average price of a new vehicle is up 13% in the past year, to $45,596, according to Edmunds.com. Average used prices have surged far more: They're up 29% to $29,646 as of February. "Until inflationary pressures start to really erode consumer and business capabilities," Fulthorpe said,"it's probably going to mean that those who have the inclination to buy a new vehicle, they'll be prepared to pay top dollar."
Wiring harnesses are bundles of wires and connectors that are unique to each model; they can't be easily re-sourced to another parts maker. Despite the war, harness makers like Aptiv and Leoni have managed to reopen factories sporadically in Western Ukraine. Still Joseph Massaro, Aptiv's chief financial officer, acknowledged that Ukraine"is not open for any type of normal commercial activity.
"The training process to bring up to speed a new workforce - it's not an overnight thing," Fulthorpe said.
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