VW, BMW to idle plants on parts shortages from Ukraine; Ford halts Russia production
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VW will idle some production lines in Wolfsburg - the world's largest car plant.
PHOTO: AFP
NEW YORK (BLOOMBERG) - BMW joined Volkswagen in warning of production outages because Russia's war in Ukraine is disrupting car-parts supplies from the country.
VW will idle some production lines in Wolfsburg - the world's largest car plant - next week before a broader shutdown the following week, the company said on Tuesday (March 1). BMW said in a separate statement it expects temporary shutdowns because of parts shortages and announced it will suspend vehicle exports as well as local assembly in Russia because of the invasion.
Meanwhile, Ford Motor Co said it is suspending operations in Russia. The auto maker told its joint venture partners that it is halting work immediately, according to a statement on Tuesday.
Ford had already been winding down its Russian operations, which today consist of commercial van manufacturing and Russian sales through a minority interest in the Sollers Ford joint venture, the company said.
Russia's invasion is sparking repercussions for manufacturers already facing significant parts bottlenecks and fallout from the coronavirus pandemic. Even before these latest supply chain setbacks, auto makers had been forced to curb production over the past year because of a chronic shortage of computer chips.
Other sites to be affected include Emden and Hanover, where VW makes commercial vehicles, as well as component factories. There may be further cuts to production, the company said. BMW did not specify which plants would be hit by outages.
VW said last week it would halt production in Zwickau and Dresden at plants that make electric cars because of shortages of parts including cable sets. On Tuesday, VW's Russia unit said it had suspended deliveries of vehicles to dealers until further notice as sanctions imposed on the nation take effect.
Ford's business in Russia is small and has been downsized over the past three years. There were just 22,000 of its vehicles - including Ford-branded automobiles produced by an unconsolidated affiliate - sold there last year, according to regulatory filings.
General Motors, Harley-Davidson and Jaguar Land Rover were also among carmakers halting shipments to Russia in recent days.
Last year, BMW sold around 49,000 vehicles in Russia, about 2 per cent of global car sales. Last year, it assembled about 12,000 vehicles at factory in the Russian exclave of Kaliningrad that BMW has operated with local partner Avtotor for more than 20 years.
