For manufacturers like Renault, the biggest obstacle now is not the chips, but the lack of containers and ships to transport units arriving from Brazil, Argentina, Colombia, South Korea and France to the ports of Lázaro Cárdenas and Veracruz. “We have benefited from the fact that the configuration of the vehicles that are manufactured in Latin America has been able to better overcome the shortage of chips. But what is now driving the industry is the logistics issue. There are not enough shipping fleets and dozens of vehicles are waiting in the yards,” says López.
Even in port, the distribution of the models to dealers has faced obstacles. Some assemblers had problems in 2021, first due to railway blockages and then due to a sinkhole, to enter the vehicles that arrived in Lázaro Cárdenas from Asia.
As manufacturers juggle keeping all the balls in the air – the ones that are already there and the new ones that are falling to them – new production and sales forecasts are continually emerging. S&P Global Mobility forecasts that the war in Ukraine will reduce global production through 2024. The auto research firm, formerly known as IHS Markit, in March lowered its global light-vehicle production forecast for 2022 by 2.6 million units, to 81.6 million. . In 2019 the production was 92 million. By 2023, the expectation is 88.5 million.
The conflict in Eastern Europe
Volkswagen, BMW and Mercedes-Benz have been among the hardest-hit automakers since the Russian invasion of Ukraine began in late February. The German government is heavily dependent on Russian energy and raw materials, but due to the situation in Eastern Europe, German automakers are facing critical supply shortages from several local suppliers.
About 45% of the wiring harnesses built in Ukraine were exported to Germany and Poland, as were various electronic components. The manufacturer of harnesses, circuits and electronic cards Jabil has two plants in Ukraine and 60% of the production goes to factories in Europe, especially Volkswagen, BMW and Audi. Although the two complexes are still in operation, they were experiencing delivery delays because several suppliers in neighboring cities have been affected by the conflict. “Inevitably, European-manufactured cars are going to be affected,” says Víctor Manuel Morales, director of Operations and Regional Development for Jabil’s operations.
The Volkswagen Group is one of them. Although the company reported that its operating profit for the first quarter increased compared to the same period in 2021, “the impact of the war in Ukraine, the current covid pandemic and the shortage of semiconductors caused a double-digit decrease in unit sales” of its Volkswagen, Seat and Skoda volume brands, the automaker said in its quarterly report. And Mexico is no stranger to all these movements.
“Volkswagen is a global brand and as such we are not immune to the environment. And, indeed, these variables, which are beyond us, impact the business and the way it develops”, says Edgar Estrada, director of Volkswagen. The brand closed 2021 as the third best-selling, but at the end of the first quarter it was in fifth position in sales, below Toyota and Kia. In April, he rose to the fourth seat.
After South Africa, Russia is the second largest supplier of palladium, which is needed for gasoline engine catalysts. It is also the third largest producer of nickel ore, which is used in the production of lithium-ion batteries. Ukraine, for its part, is one of the most important suppliers of neon gas, necessary to manufacture semiconductors, and the lack of this input will further lengthen the shortage of chips.