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.
The war's damage to the auto industry has emerged first in Europe. But U.S. production will likely suffer eventually, too, if Russian exports of metals — from palladium for catalytic converters to nickel for electric vehicle batteries — are cut off. The robust recovery that followed the recession caused demand for autos to vastly outstrip supply — a mismatch that sent prices for new and used vehicles skyrocketing well beyond overall high inflation.
"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." The wiring shortage has slowed factories in Germany, Poland, the Czech Republic and elsewhere, leading S&P to slash its forecast for worldwide auto production by 2.6 million vehicles for both this year and next. The shortages could reduce exports of German vehicles to the United States and elsewhere.
"Long term," Massaro told analysts, "we'll have to assess if and when it makes sense to go back to Ukraine." "The training process to bring up to speed a new workforce — it's not an overnight thing," Fulthorpe said.