Automotive and parts supply chains have long been disrupted. First of all, as the German media writes, there are not enough wiring harnesses and associated assembled cables, connectors and electronic components.
According to a study by the consultancy AlixPartner, about 7% of electrical wiring for car factories in the European Union (EU) is produced in Ukraine. As LBBW analyst Frank Biller explains, there is a worst-case scenario risk of production loss of up to 650,000 vehicles in Europe, or about 4%.
Why was the electrical wiring entrusted to Ukraine?
It is a cheap place to organize production for car suppliers. There are relatively low wages yet close to car suppliers and production sites in Germany, Poland, Romania and Slovakia, experts say.
The production of cable assemblies is still largely done manually, partly due to the lack of standards in the industry. For this reason, electrical wiring manufacturers have established an extensive network of assembly points in low-paid regions of Eastern Europe (about 150 points) and North Africa (about 50 points).
Since 1998, 22 foreign suppliers have invested approximately USD 600 million in the construction of 38 production sites in western Ukraine.
“Almost every global wiring harness manufacturer in the top ten has at least one assembly site in Ukraine,” notes AlixPartners.
What is the problem and how to solve it?
Hundreds of wires and lines are laid in the wiring harnesses of modern cars, there are several thousand points of contact, the weight of the wiring for one car is more than 50 kg. No vehicle can do without electricity. If there are no wiring harnesses, factory lines, such as those at BMW, Volkswagen and Porsche, are at a standstill.
There are no large stocks of wiring harnesses as they are often made to order for specific machine configurations.
In particular, Germany mainly depends on wiring harnesses and their components produced in Ukraine, but not Italy, France and England, for logistical reasons these products are delivered to them from North Africa.
Experts say the only way to deal with the crisis in the auto industry is to quickly move production or assembly of cables to other countries. Although it is expensive and can take three to six months. The problem here is staff availability and training, as well as moving assembly and testing equipment.
Source: Z R