VW and Renault to Idle Some Car Plants on Russia-Ukraine Bottlenecks
VW and Renault to Idle Some Car Plants on Russia-Ukraine Bottlenecks
(Bloomberg) -- Factories operated by Volkswagen AG and Renault SA will suspend operations next week as Russia’s invasion of Ukraine sends ripples across European supply chains.
VW will halt production at its Zwickau and Dresden plants in eastern Germany for a few days in early March because of a shortage of parts made in Ukraine, including electric cable sets, a spokesperson said Friday. Zwickau is home to Europe’s biggest electric-car plant, with a capacity of about 330,000 vehicles a year.
Renault will stop operations at its Moscow assembly plant as bottlenecks at the Russian border delay parts deliveries, a spokeswoman said. Another plant, operated by Renault’s AvtoVaz venture in Togliatti in the south of the country, will halt production Monday on a shortage of semiconductors.
The moves come after the war forced companies from Nestle SA to Carlsberg A/S to shut facilities in Ukraine over the last two days. Now the effects on manufacturers are spreading beyond the country’s borders.
Russia’s invasion has handed businesses just emerging from the coronavirus pandemic a fresh set of challenges. Even before these latest supply-chain setbacks, automakers had been forced to curb production over the past two years because of a chronic shortage of computer chips.
German automotive companies and suppliers maintain some 49 production sites in Russia and Ukraine, and the consequences for the companies and their employees aren’t yet entirely clear, according to the German car lobby group VDA.
Renault produces models including the Kaptur and Duster at the Moscow site, and makes Lada cars through its AvtoVaz venture. Russia is the French automaker’s second-biggest market, accounting for 18% of sales by volume.
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