The war's impact on the supply chain is forcing VW to make new production plans.
So far, Russia's assault on Ukraine has had negative global effects that are severely affecting the well-being of our lives. The biggest issue at the moment is the strain that it is placing on the global oil supply which is something that we are seeing with the average cost of gas increasing exponentially. Volkswagen boss Herbert Diess also highlighted that the conflict will add to the layer of obstacles that carmakers are currently faced with.
Although under extremely unfortunate circumstances, Diess now highlights that the German company is looking at its American and Chinese production plants to take on more units. It is being forced to make this decision because the conflict is placing a strain on its supply of wire harnesses and other crucial components.
Diess made this announcement during Volkswagen's annual press conference earlier this week and confirmed it would be a temporary solution until the situation is ironed out. The harnesses used in its European factories are sourced from Ukraine and are said to be causing a backlog at most of its German plants. If a resolution is not found in the next month, alternate plans will need to be made.
Speaking to Automotive News, an unnamed spokesperson for the brand's American arm confirmed that if Volkswagen approached them with the offer to produce more cars, it would happily accept and inform its dealership network of the update. Tom McMenamin, chairman of the VW National Dealer Advisory Council, added that the local dealer network can expect an increase in the supply of locally built cars but didn't declare how many units exactly.
Increasing production requirements would mean that VW North America would get access to more semiconductor chips. As a result of this, it would also be able to increase the output of models such as the Volkswagen Atlas range. This would have a positive effect on increasing its market share while other manufacturers are being throttled due to the supply chain crisis.
McMenamin explains, "It's going to make all the difference in the world to the dealers, and it's going to give us a competitive advantage in our markets because we'll have products and most of our competitors won't."
VW's plant in Puebla, Mexico would also mean that stock of the Tiguan and Taos would improve. There's no indication that Audi products are included in this proposed shift of production but the premium brand has not been ruled out.