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March 1, 2022

VW Group warns of supply chain disruptions due to Ukraine crisis

The Volkswagen Group’s global supplier network, which comprises more than 40,000 suppliers, also includes a number of suppliers in western Ukraine; Skoda is particularly vulnerable.

By David Leggett

The VW Group has warned that due to the current situation in Ukraine, there may be disruptions in the supply chain. This can lead to adjustments in production at individual VW Group locations, the company said in a statement. VW Group Purchasing is also ‘engaged in an intensive exchange with the relevant suppliers and is reviewing alternatives’, the company said.

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VW Group’s Czech Republic based Skoda brand seems particularly vulnerable. Skoda said that it is facing critical supply shortages of parts from several local suppliers and ‘will limit production of the Enyaq iV from this week on’.

Skoda also assembles cars from SKD kit format in Ukraine – the Superb, Kodiaq, Karoq and Fabia Combi – working in partnership with Eurocar. Production of Skoda vehicles is currently suspended at the Solomonovo plant – where all output is intended for customers in the Ukrainian market only.

In terms of sales at risk, the Russian market is one of Skoda ’s most important markets globally. In 2021, Russia was the second-largest market overall. A total of 90,400 Skoda vehicles were delivered there. Ukraine has also been a stable market, with sales of around 6,000 Skoda vehicles a year. Since 2002, approximately 190,000 Skodas have been produced at the plant in Ukraine.

Skoda plants in Russia

In Russia, Skoda produces the Rapid, Octavia, Karoq and Kodiaq at two facilities. In Nizhny Novgorod, Skoda produces three models – the Octavia, Karoq and Kodiaq. The Rapid is produced at Skoda ’s Kaluga plant. Skoda says production at the Russian plants is still running, but adds that ‘the impact of possible disruptions to the supply chains is being continuously analysed’.

‘Dismayed by attack on Ukraine’

Skoda also said in a statement: ‘We are dismayed by the military attack on Ukraine and sincerely hope for the swift cessation of hostilities and a speedy return to diplomacy following international law.

‘We are very concerned for the people in Ukraine, especially the families of our more than 600 Ukrainian colleagues in the Czech Republic and the whole Eurocar team at the Solomonovo factory in Ukraine and the headquarters in Kyiv. Our sympathy goes out to them during these difficult days. At the same time, our thoughts are with our colleagues at Volkswagen Group Rus whose situation is also serious.’

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  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
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