Aftermarket April 2022

NEWS The war in Ukraine has continued to impact on the automotive sector since the country was invaded by Russia at the end of February, but the full effect on supply chains resulting from disruption caused by the conflict has yet to be felt. At Messe Frankfurt, the home of Automechanika Frankfurt in the city, a first aid centre with emergency accommodation for refugees from Ukraine has been built. Uwe Behm, Member of the Board of Management of Messe Frankfurt responsible for the exhibition grounds, commented: "We have quickly and unbureaucratically set up emergency accommodation on our exhibition grounds in Hall 1, as immediate assistance is required. This has become a first point of contact or intermediate station to provide people who have had to flee Ukraine with everything they need until they can be placed in longer-term accommodation." In addition, Fairconstruction, a subsidiary of Messe Frankfurt, helped to equip two sports halls for refugees in Frankfurt with stand construction materials. In view of the situation, Messe Frankfurt had already announced it would not admit Russian exhibitors as well as exhibitors from Belarus to its trade fairs until further notice. It also suspended all visitor marketing activities in Russia and Belarus. Meanwhile, with scores of well-known household names pulling out of Russia, from McDonalds downwards, Bridgestone is one of a number of automotive companies that has suspended its Russian operations. The company has also frozen new investments and suspended all exports to Russia. The company said it intends to continue financially supporting its 1,000 employees in the country Bridgestone EMIA has also made a € 1 million donation to the Red Cross, in addition to the € 2.5 million donated by Bridgestone Corporation to the Office of the United Nations High Commissioner for Refugees (UNHCR). Earlier in March, Volkswagen said it would stop production of vehicles in Russia at its sites in Kaluga and Nizhny Novgorod, as well as exports into Russia. Vehicle exports into Russia were also stopped. Meanwhile, Stellantis through its Foundation, committed to donating € 1 million in humanitarian aid to support Ukrainian refugees, relying on a local NGO to support Ukrainians in using this fund. Looking ahead, a report looking at the resilience of global supply chains has suggested that pre-existing raw material shortages resulting from the pandemic could be extended by the conflict, and could affect the roll-out of EVs through the next few years. The Achilles Supply Chain Resilience Index (ASCRI) for October to December 2021 showed a score of 44.9%. However, it is anticipated that the score will drop below the 40% high risk threshold for the first time by the end of March. Shortages of tin, a key component of circuit boards, molybdenum, a trace mineral used in EV power applications, as well as nickel, zinc, copper, oil and gas, are expected to affect downstream global supply chains. The report also suggested that lithium scarcity could result in reversals on the EV front, with 20 million electric vehicles predicted to actually be taken out of production between 2022 and 2029. Katie Tamblin, author of the report and Chief Product Officer at Achilles, commented: “Supply chain data emerging from Q4 2021 was already indicating that 2022 would be a rocky road for global supply chains, and now with the additional conflict in Ukraine, the outlook is extremely concerning. Pummelled by so many challenges over the last two years, supply chains have not had time to recover, and we now face a critical tipping point that could have both supply and cost ramifications rippling through industrial and consumer markets for years to come.“ She added: “Now is the time to practice the lessons of the pandemic, and as we emerge into a new world order, use data to inform purchasing decisions. Our data shows that to weather this crisis, organisations need visibility across their supply chains to identify vulnerabilities and alternative sources of supply.” n The first aid centre in Messe Frankfurt’s Hall 1. Left to right: Uwe Behm, Member of the Board of Management of Messe Frankfurt, Elke Voitl, Head of Social Affairs of the City of Frankfurt am Main, Peter Feldmann, Lord Mayor of the City of Frankfurt am Main and Chairman of the Supervisory Board of Messe Frankfurt 4 AFTERMARKET APRIL 2022 www.aftermarketonline.net Ukraine: Automotive sector reacts as supply chain issues expected © City of Frankfurt am Main Ben Kilb