The Global Car Industry is Feeling the Impact of the Ukraine War

The global car industry is currently feeling the impact of the ongoing conflict in Ukraine, with many automakers struggling to come to terms with the disruption to their supply chains. The war has disrupted the production of wiring systems, which are essential for the assembly of vehicles. These systems are usually tailor-made to specific vehicles and are some of the first components to be installed during the manufacturing process.

The global car industry is already feeling the strain, with many automakers dependent on suppliers from all over the world. The top automakers also employ millions of international employees, which makes them vulnerable to disruptions in their supply chains. The pandemic was a significant challenge for the industry, but analysts believe that the ongoing war in Ukraine will accelerate a fundamental reordering of the global economy.

Many analysts expect a deep recession that will completely tank new car sales for months or possibly even years. Others are more optimistic, with some predicting that the industry will bounce back quickly once the supply chains are restored. The German Association of the Automotive Industry has issued a warning to car makers, citing the impact on supplies of raw materials from Russia. These materials are essential for electric car batteries and palladium, which is used in hybrid vehicles.

The prices of metals such as nickel and palladium are expected to rise, leading to higher costs for new cars in the US. However, this is not a major concern for automakers at present. The biggest challenge is international trade, with concerns that if trade gets damaged, there will be severe consequences for Europe and the world. Exchange of goods and services across borders makes up 86% of the GDP of the European Union, making it a critical component of the region's economy.

The impact of the war on international trade is already being felt, with Russian oil sales slowing down to almost complete stop. This has affected many refiners, shippers, and other companies, leading to widespread disruptions in the global energy market. However, experts are not sure whether China will fill the gap left by the German automaker's halt in Russia. China is currently very intertwined economically with the West, but its response to the crisis remains uncertain.

Many German car makers and US-based companies like GM and Tesla have a lot invested in China, but none of these companies have mentioned pulling back from the country yet. They are hoping that market forces will determine their future, rather than geopolitics. In the end, it is the customers who will decide the fate of the global car industry. The question on everyone's mind is how long it will take for costs to return to normal and whether the industry will ever become too dependent on China.

The pandemic gave automakers a major round of practice in dealing with logistical chaos, but the war in Ukraine has proven to be an even more significant challenge. Automakers are looking for alternatives to Ukraine as a source for wiring systems, with one potential country being Tunisia. However, finding an alternative supplier will take anywhere from two to four weeks, rather than just a few days.

The biggest worry for automakers is the impact on international trade, rather than finding alternative suppliers. The global car industry is highly interconnected, and disruptions in supply chains can have far-reaching consequences. If international trade gets damaged, there will be severe consequences for Europe and the world. This is why experts are warning of a potential recession that could completely tank new car sales for months or possibly even years.

In conclusion, the global car industry is feeling the impact of the ongoing conflict in Ukraine, with many automakers struggling to come to terms with the disruption to their supply chains. The war has highlighted the vulnerability of the industry to disruptions in international trade and the importance of finding alternative suppliers. While some analysts are optimistic about the future, others predict a deep recession that will have far-reaching consequences for the industry and the global economy.

"WEBVTTKind: captionsLanguage: enif you're suspecting car prices to drop after semiconductor chip supplies will get back to normal there's yet another thing coming today we're looking at how car makers are facing rising costs without russian metal supplies and the power that china has too metals haven't been a target of western sanctions yet but some suppliers are already steering clear of russian goods many people don't know this but some 40 percent of the metal materials used by car makers come from russian companies i'm talking about palladium nickel and other materials did you know that russia is the world's largest producer of palladium palladium is a key component of catalytic converters in all combustion engine cars it's also used in high pollution systems at the beginning of march the price of palladium was two thousand five hundred and eighty nine dollars an ounce by march tenth the prices soared to three thousand eighty four dollars per ounce rush is also the world's largest producer of nickel nickel is a metal that is critical to ev batteries on march 7th the price of nickel skyrocketed more than 132 percent compared to last year it was almost 43 thousand dollars per metric ton just one day later it doubled to a hundred thousand dollars per metric ton this caused the london metal exchange to suspend trading for the rest of the day to suspend the market panic take a guess at how much nickels in the ev battery well it used to be that about sixty percent of an ev battery was nickel but in recent years global automakers increased the percentage of nickel and cathodes reason was to enhance ev battery's energy density so that vehicles could drive for longer distances but since that summer in korea some companies have been manufacturing batteries containing up to 90 nickel so this price surge is a huge blow to the global car industry batteries are one of the most expensive components of an electric vehicle in recent years automakers have been expecting batteries to become cheaper and therefore drive down the price of electric vehicles and make them more affordable well right now these soaring metal prices makes this no longer realistic at least not in the near future the war is also impacting the price of other metals take aluminum for example which is used heavily in car bodies and engines the last four months the price of aluminum has seen a sixty percent rise and don't forget rising energy bills so you can see how all of this is adding more pressure to car makers they cannot avoid this impacting their business models so if you've been setting up for a new ride just know the prices aren't expected to lower anytime soon but actually it's quite the opposite at the end of the day it's you the consumer and driver who will feel the pain right now the car assembly lines are going quiet across europe especially in countries like germany britain and austria here's the reason why months ago china and russia declared a partnership without limits then russia invaded ukraine now the world is waiting to see what position china will take you can't ignore china in fact china is a hot topic right now the reason is because in recent years more companies in the automobile industry have become increasingly dependent on china but this dependence puts the car industry in a vulnerable position many people know that china and russia are friends this has put a real strain on relations between beijing and the us and between beijing and europe did you know that china is the world's largest and fastest growing car market and it's a critical source for revenue for many large automakers and that even includes u.s companies like gm and tesla many people don't know that volkswagen sells more than half its cars in china china accounts for around one-third of the sales of mercedes-benz and bmw china's also become a crucial supplier for the electric vehicle industry and even battery manufacturers in general this is because china is an extremely important source of refined lithium refined lithium is what's needed to make car batteries for lithium-powered battery electric vehicles but it's not just about supplies it's also about transportation many people don't know this but the current war is interfering with air freight and rail traffic on the trans-siberian railway which is being used by german car makers to supply parts to factories in china all in all you can see why all eyes are on china now you can only imagine china strategizing which cards to play they have the us and the west on one side versus russia on the other they've been playing both sides until now gingerly which position will they maintain let's go back to russia would it surprise you to hear that russia makes up less than two percent of german car sales but it wasn't always that way at one time german car makers saw russia has a huge growth potential in the car market one major reason is that rush is a member of bric brick stands for brazil russia india and china it's a group of developing countries that are at a similar stage towards being an economically developed country despite russia's brick membership german car makers quickly abandoned russia just weeks ago after russian president vladimir putin sent his stinks into ukraine volkswagen haunted production of their facilities in russia and they suspended exports of all vehicles indefinitely projecting extensive interruption of business activities volkswagen even suspended production in its main german plant in wolfsburg it also suspended production in other locations including a factory and zohikaw which produces evs and now this is impact in the u.s too that's because volkswagen's zvic cow factory exports id.4 suvs to the us or at least they used to bmw and mercedes-benz had limited manufacturing in russia but both announced that they were hot manufacturing and exports to russia too bmw also shut down several factories in germany austria and britain they're all shut down because of parts shortages bmw also partially caused production of its main munich point porsche idled one of their factories in the leap site this is the factory that makes the cayenne sports utility vehicles now did you know that the biggest foreign car maker in russia is the renault nissan mitsubishi alliance last year in 2021 they sold more than half a million vehicles in russia they did that in a joint venture with the russian carmaker aftovaz in the first week of march renault's shares fell 17 but they haven't said anything yet about what they're planning to do to fix it in russia if at all but it's not just about european factories shutting down or suspending production right now there's an even more immediate problem facing car makers across europe western ukraine was responsible for supplying wiring systems for these car makers but now due to the war the supply of wiring systems been cut off completely to make matters worse the supply chains were already very strained because of the shortage of the semiconductors and other parts ukraine was a popular place to manufacture these systems to connect electronic components like entertainment systems or tail lights inside a car ukraine is a major source of neon a gas that's used for high performance lasers these lasers are required for the production of semiconductors why was ukraine such a popular choice for automakers to assemble these systems it's done mainly by hand and need a large number of skilled workers to do it ukraine was perfect for that this is because labor in ukraine isn't very expensive and the ukrainian workforce is well educated another bonus is how close ukraine is to european car factories automotive suppliers like leone have operations in western ukraine and this part of the country is only a 12 hour drive to the bmw factories in bavaria now all production activities have stopped in ukraine wiring systems are usually tailor made to specific vehicles no car can operate without them and these wiring harnesses are some of the first components to be installed in the new vehicle so if they can't be supplied the car assembly line cannot proceed the global car industry is already feeling the impact now car companies are being put in a vulnerable position due to most automakers source their suppliers from all over the world not just within their home country the top automakers also employ millions of international employees the pandemic was already a hard blow to the industry analysts believe the safest bet is to manufacture close to home this lowers the risk of disruption for supplies and production this might surprise you but actually many analysts were already expecting a fundamental reordering of a global economy many believe that the russian ukraine war will only accelerate this reordering so it'll come sooner than we thought many analysts expect a deep recession that will completely tank new car sales for months or possibly even years others are more optimistic the german association of the automotive industry issued their own warning for car makers they warned about impact to supplies of raw materials in russia supplies and materials that car makers need like nickel it's essential for electric car batteries and palladium because the prices of metals rising price of new cars in the us is also expected to decline by thousands of dollars but it's not like automakers are completely inexperienced and unprepared just think of the pandemic the pandemic gave automakers a major round of practice in dealing with logistical chaos now that ukraine is currently out of picture as a source for wiring systems companies are looking for alternatives one of the potential countries right now is tunisia but switching to alternative sources of wiring systems won't take just a few days instead the transition can take anywhere from two to four weeks but finding an alternative supplier of wiring systems is not the biggest problem on automakers minds it's international trade actually this is a fear for all european companies in general not just automaker if international trade gets damaged there will be severe consequences for europe and the world right now exchange of goods and services across borders makes up 86 of the gdp of the european union in the u.s economy it makes up 23 and currently russian oil sales have been slowing down to an almost complete stop internationally so what does the future hold experts believe that it all depends on what china does if nato members impose an embargo china is expected to buy more oil and coal from russia this is because the global imposed sanctions on imported russian oil has affected many refiners shippers and other companies but if china decides to buy more oil from russia it will fill the massive hole left from the german automaker's halt in russia but it's all still up in the air experts still aren't sure whether china will end up buying more from russia anyway it could all just be one big panic for nothing one belgian researcher mentioned that right now china is very intertwined economically with the west and so whether or not china moves to support russia in this way is still to be determined german car makers and u.s based companies like gm and tesla have a lot invested in china but so far none of these companies have mentioned pulling back from china yet they're hoping that market forces will determine their future and i don't mean geopolitics but i'm talking about customers in the end the customers will decide the future is unclear for now but one thing for certain is that everyone has seen clearly a huge impact and risks of doing business with an authoritarian country in general and depending on others for supplies but now you tell me how long do you think it'll be before the costs for car makers will come back down to normal do you think that'll ever happen do you think that the car industry is becoming overly dependent on china if you like this video please like and subscribe thanks for your support so if you never want to miss another one of my new car repair videos remember to ring that bellif you're suspecting car prices to drop after semiconductor chip supplies will get back to normal there's yet another thing coming today we're looking at how car makers are facing rising costs without russian metal supplies and the power that china has too metals haven't been a target of western sanctions yet but some suppliers are already steering clear of russian goods many people don't know this but some 40 percent of the metal materials used by car makers come from russian companies i'm talking about palladium nickel and other materials did you know that russia is the world's largest producer of palladium palladium is a key component of catalytic converters in all combustion engine cars it's also used in high pollution systems at the beginning of march the price of palladium was two thousand five hundred and eighty nine dollars an ounce by march tenth the prices soared to three thousand eighty four dollars per ounce rush is also the world's largest producer of nickel nickel is a metal that is critical to ev batteries on march 7th the price of nickel skyrocketed more than 132 percent compared to last year it was almost 43 thousand dollars per metric ton just one day later it doubled to a hundred thousand dollars per metric ton this caused the london metal exchange to suspend trading for the rest of the day to suspend the market panic take a guess at how much nickels in the ev battery well it used to be that about sixty percent of an ev battery was nickel but in recent years global automakers increased the percentage of nickel and cathodes reason was to enhance ev battery's energy density so that vehicles could drive for longer distances but since that summer in korea some companies have been manufacturing batteries containing up to 90 nickel so this price surge is a huge blow to the global car industry batteries are one of the most expensive components of an electric vehicle in recent years automakers have been expecting batteries to become cheaper and therefore drive down the price of electric vehicles and make them more affordable well right now these soaring metal prices makes this no longer realistic at least not in the near future the war is also impacting the price of other metals take aluminum for example which is used heavily in car bodies and engines the last four months the price of aluminum has seen a sixty percent rise and don't forget rising energy bills so you can see how all of this is adding more pressure to car makers they cannot avoid this impacting their business models so if you've been setting up for a new ride just know the prices aren't expected to lower anytime soon but actually it's quite the opposite at the end of the day it's you the consumer and driver who will feel the pain right now the car assembly lines are going quiet across europe especially in countries like germany britain and austria here's the reason why months ago china and russia declared a partnership without limits then russia invaded ukraine now the world is waiting to see what position china will take you can't ignore china in fact china is a hot topic right now the reason is because in recent years more companies in the automobile industry have become increasingly dependent on china but this dependence puts the car industry in a vulnerable position many people know that china and russia are friends this has put a real strain on relations between beijing and the us and between beijing and europe did you know that china is the world's largest and fastest growing car market and it's a critical source for revenue for many large automakers and that even includes u.s companies like gm and tesla many people don't know that volkswagen sells more than half its cars in china china accounts for around one-third of the sales of mercedes-benz and bmw china's also become a crucial supplier for the electric vehicle industry and even battery manufacturers in general this is because china is an extremely important source of refined lithium refined lithium is what's needed to make car batteries for lithium-powered battery electric vehicles but it's not just about supplies it's also about transportation many people don't know this but the current war is interfering with air freight and rail traffic on the trans-siberian railway which is being used by german car makers to supply parts to factories in china all in all you can see why all eyes are on china now you can only imagine china strategizing which cards to play they have the us and the west on one side versus russia on the other they've been playing both sides until now gingerly which position will they maintain let's go back to russia would it surprise you to hear that russia makes up less than two percent of german car sales but it wasn't always that way at one time german car makers saw russia has a huge growth potential in the car market one major reason is that rush is a member of bric brick stands for brazil russia india and china it's a group of developing countries that are at a similar stage towards being an economically developed country despite russia's brick membership german car makers quickly abandoned russia just weeks ago after russian president vladimir putin sent his stinks into ukraine volkswagen haunted production of their facilities in russia and they suspended exports of all vehicles indefinitely projecting extensive interruption of business activities volkswagen even suspended production in its main german plant in wolfsburg it also suspended production in other locations including a factory and zohikaw which produces evs and now this is impact in the u.s too that's because volkswagen's zvic cow factory exports id.4 suvs to the us or at least they used to bmw and mercedes-benz had limited manufacturing in russia but both announced that they were hot manufacturing and exports to russia too bmw also shut down several factories in germany austria and britain they're all shut down because of parts shortages bmw also partially caused production of its main munich point porsche idled one of their factories in the leap site this is the factory that makes the cayenne sports utility vehicles now did you know that the biggest foreign car maker in russia is the renault nissan mitsubishi alliance last year in 2021 they sold more than half a million vehicles in russia they did that in a joint venture with the russian carmaker aftovaz in the first week of march renault's shares fell 17 but they haven't said anything yet about what they're planning to do to fix it in russia if at all but it's not just about european factories shutting down or suspending production right now there's an even more immediate problem facing car makers across europe western ukraine was responsible for supplying wiring systems for these car makers but now due to the war the supply of wiring systems been cut off completely to make matters worse the supply chains were already very strained because of the shortage of the semiconductors and other parts ukraine was a popular place to manufacture these systems to connect electronic components like entertainment systems or tail lights inside a car ukraine is a major source of neon a gas that's used for high performance lasers these lasers are required for the production of semiconductors why was ukraine such a popular choice for automakers to assemble these systems it's done mainly by hand and need a large number of skilled workers to do it ukraine was perfect for that this is because labor in ukraine isn't very expensive and the ukrainian workforce is well educated another bonus is how close ukraine is to european car factories automotive suppliers like leone have operations in western ukraine and this part of the country is only a 12 hour drive to the bmw factories in bavaria now all production activities have stopped in ukraine wiring systems are usually tailor made to specific vehicles no car can operate without them and these wiring harnesses are some of the first components to be installed in the new vehicle so if they can't be supplied the car assembly line cannot proceed the global car industry is already feeling the impact now car companies are being put in a vulnerable position due to most automakers source their suppliers from all over the world not just within their home country the top automakers also employ millions of international employees the pandemic was already a hard blow to the industry analysts believe the safest bet is to manufacture close to home this lowers the risk of disruption for supplies and production this might surprise you but actually many analysts were already expecting a fundamental reordering of a global economy many believe that the russian ukraine war will only accelerate this reordering so it'll come sooner than we thought many analysts expect a deep recession that will completely tank new car sales for months or possibly even years others are more optimistic the german association of the automotive industry issued their own warning for car makers they warned about impact to supplies of raw materials in russia supplies and materials that car makers need like nickel it's essential for electric car batteries and palladium because the prices of metals rising price of new cars in the us is also expected to decline by thousands of dollars but it's not like automakers are completely inexperienced and unprepared just think of the pandemic the pandemic gave automakers a major round of practice in dealing with logistical chaos now that ukraine is currently out of picture as a source for wiring systems companies are looking for alternatives one of the potential countries right now is tunisia but switching to alternative sources of wiring systems won't take just a few days instead the transition can take anywhere from two to four weeks but finding an alternative supplier of wiring systems is not the biggest problem on automakers minds it's international trade actually this is a fear for all european companies in general not just automaker if international trade gets damaged there will be severe consequences for europe and the world right now exchange of goods and services across borders makes up 86 of the gdp of the european union in the u.s economy it makes up 23 and currently russian oil sales have been slowing down to an almost complete stop internationally so what does the future hold experts believe that it all depends on what china does if nato members impose an embargo china is expected to buy more oil and coal from russia this is because the global imposed sanctions on imported russian oil has affected many refiners shippers and other companies but if china decides to buy more oil from russia it will fill the massive hole left from the german automaker's halt in russia but it's all still up in the air experts still aren't sure whether china will end up buying more from russia anyway it could all just be one big panic for nothing one belgian researcher mentioned that right now china is very intertwined economically with the west and so whether or not china moves to support russia in this way is still to be determined german car makers and u.s based companies like gm and tesla have a lot invested in china but so far none of these companies have mentioned pulling back from china yet they're hoping that market forces will determine their future and i don't mean geopolitics but i'm talking about customers in the end the customers will decide the future is unclear for now but one thing for certain is that everyone has seen clearly a huge impact and risks of doing business with an authoritarian country in general and depending on others for supplies but now you tell me how long do you think it'll be before the costs for car makers will come back down to normal do you think that'll ever happen do you think that the car industry is becoming overly dependent on china if you like this video please like and subscribe thanks for your support so if you never want to miss another one of my new car repair videos remember to ring that bell\n"