BMW and Volkswagen reported they had to halt their plants not only in Russia but in Europe due to a tense geopolitical situation in Ukraine. The companies left the Russian car market in response to Russia's actions in Ukraine. However, they had to suspend their operations in Europe amid shortages of auto parts. Ukraine produces a large part of the world’s neon gas. This gas has a variety of applications, for example, in lasers designed to etch microchips on silicon wafers. About 70% of the world's neon imports are covered by Ukraine. Besides, about 20% of wire harness production, essential for the assembly of a car, comes from Ukraine. “The problem with wire harnesses is that they are fundamental. You cannot start assembling even an incomplete car without wire harnesses,” Alexandre Marian, a managing director at consultancy AlixPartners in Paris, said. Currently, the companies are facing severe supply chain problems. “If you send a truck, you can’t say whether it will be in Poland in three hours or three days or will be sent back. We have to check day by day, is it possible to send one truck today, or two trucks,” one person familiar with the process at VW explained. Herbert Diess, VW chief executive, said: “We started to work on alternatives, which are on the way.” Those alternatives include shifting equipment or replicating it from scratch.
