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The Yemeni Houthis are unceremoniously bombing ships sailing through the Red Sea, threatening shipping in the Suez Canal, which connects Europe with Asia. The events had an immediate
The route through the Suez Canal is the shortest between Asia and Europe, and to avoid the risk of being hit, many companies have decided to stop shipping in the adverse zone and choose an alternative safe route around the Cape of Good Hope. However, such flights take much longer and require additional fuel costs, which is expected to affect the delivery time of car parts and the cost of logistics itself.
The outcome of events was not long in coming: a number of car manufacturers have already experienced production problems. In fact, some companies even stopped producing their cars.
The Hungarian Suzuki factory in Esztergom, where the Vitara and S-Cross crossovers are assembled, has been temporarily shut down. The reason is the lack of engines and other components for the production of the mentioned models, which were delayed along the way due to an unplanned route change due to the military conflict in the Red Sea. Germany’s Volkswagen is also negotiating a logistics overhaul, which only resulted in a decline in sales of its products, but did not completely halt production. Until I stopped…
But Sweden’s Volvo has completely ‘frozen’ the assembly of its cars in Ghent, Belgium, where production of the C40 Recharge electric car and the XC40 compact crossover has started. The reason for this is the lack of transmission units that the brand sources in China. The assembly line was also delayed by US-based Tesla, which makes premium Model Y electric crafts at its own factory near Berlin. Due to a shortage of car parts that stalled during deliveries from the Middle Kingdom, the company was at a standstill until at least mid-February.
Meanwhile, overseas Stellantis, which is currently the largest automotive alliance in the world, decided to take extreme measures: arrange the delivery of necessary parts through air travel. It is even scary to imagine how much the price of automotive products from the brands in its portfolio will increase due to forced cost overruns.
However, Stellantis is not a one-off Tesla production and the Peugeot and Citroen, Vauxhall and Opel, FIAT and DS models are actively sold in Europe. This means that the effective marginality of the project is facilitated by the volumes of cars sold. Therefore, under no circumstances should we “slow down”, although independent experts have already predicted a decline in sales of the brands covered by the distribution, as well as inevitable financial problems associated with fulfilling obligations to customers.
It seems that another large-scale crisis is on the way, which will paralyze the already shaky Western auto industry, which has not had time to recover from the consequences of the coronavirus pandemic and the introduction of anti-Russian sanctions.
The route through the Suez Canal is the shortest between Asia and Europe, and to avoid the risk of being hit, many companies have decided to stop shipping in the adverse zone and choose an alternative safe route around the Cape of Good Hope. However, such flights take much longer and require additional fuel costs, which is expected to affect the delivery time of car parts and the cost of logistics itself.
The outcome of events was not long in coming: a number of car manufacturers have already experienced production problems. In fact, some companies even stopped producing their cars.
The Hungarian Suzuki factory in Esztergom, where the Vitara and S-Cross crossovers are assembled, has been temporarily shut down. The reason is the lack of engines and other components for the production of the mentioned models, which were delayed along the way due to an unplanned route change due to the military conflict in the Red Sea. Germany’s Volkswagen is also negotiating an overhaul of logistics, which only reduced sales of its products, but did not completely halt production. Until I stopped…
But Sweden’s Volvo has completely ‘frozen’ the assembly of its cars in Ghent, Belgium, where production of the C40 Recharge electric car and the XC40 compact crossover has started. The reason for this is the lack of transmission units that the brand sources in China. The assembly line was also delayed by US-based Tesla, which makes premium Model Y electric crafts at its own factory near Berlin. Due to a shortage of car parts that stalled during deliveries from the Middle Kingdom, the company was at a standstill until at least mid-February.
Meanwhile, overseas Stellantis, which is currently the largest automotive alliance in the world, decided to take extreme measures: arrange the delivery of necessary parts through air travel. It is even scary to imagine how much the price of automotive products from the brands in its portfolio will increase due to forced cost overruns.
However, Stellantis is not a one-off Tesla production and the Peugeot and Citroen, Vauxhall and Opel, FIAT and DS models are actively sold in Europe. This means that the effective marginality of the project is facilitated by the volumes of cars sold. Therefore, under no circumstances should we “slow down”, although independent experts have already predicted a decline in sales of the brands covered by the distribution, as well as inevitable financial problems associated with fulfilling obligations to customers.
It seems that another large-scale crisis is on the way, which will paralyze the already shaky Western auto industry, which has not had time to recover from the consequences of the coronavirus pandemic and the introduction of anti-Russian sanctions.
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
