Ukraine supplies numerous automotive components and small parts for European cars, particularly for high-end brands like Maybach, Lamborghini, and Porsche. Many of these components require labor-intensive manufacturing. For instance, Ukrainian plants assemble wiring harnesses and upholster car seats.
Most foreign auto component companies are concentrated in western Ukraine. This choice of region is primarily due to the logistical proximity to end consumers in the EU. However, for some companies, the relatively safe regions did not become a reason to stay in Ukraine.
Companies that have left Ukraine are in the minority. Liga.Tech collected data on which companies returned to work in Ukraine after the start of the full-scale war, what they produce, and who left the market.
According to a Forbes study on Ukraine's top 50 exporters in 2022, the country provides 20% of European wiring harness supplies, exports plastic switches, electronics, and other small parts. The proximity to the western border saved the industry with an annual turnover of more than $500 million. In the spring of 2022, auto giants such as Volkswagen Group, BMW, Mercedes, and Porsche reduced their own production, fearing a disruption in supplies from Ukrainian factories. However, automotive component manufacturers eventually managed to overcome all the difficulties and resume supplies.
Wiring "holds" a car together. On average, a car requires about five kilometers of wiring harnesses to produce. They are unique to each model.
Among the 50 exporting companies that helped the Ukrainian economy survive in 2022 are auto component manufacturers. These are Leoni, Kromberg & Schubert, and Elektrokontakt Ukraine (Nexans Group).
The largest supplier of automotive cables has production facilities in Stryi, Lviv Oblast, and Kolomyia, Ivano-Frankivsk Oblast. The components produced there are supplied to automotive plants in Poland, Slovakia, Hungary, the Czech Republic, Germany, Spain, Portugal, Italy, Belgium, the United Kingdom, the United States, and Austria. They are used to complete the products of such world-famous brands as Porsche, Volkswagen, Audi, Lamborghini, and Opel.
Leoni plants employ 7,000 Ukrainians. When the full-scale war started, the plants stopped operating, which led to a crisis in the industry. But it was resolved quickly enough.
At first, Leoni moved some of its employees to Romania, where they continued to work at local plants, Automotive News reports. This was done because two-thirds of the company's employees in Ukraine are women, and their travel abroad is not restricted.
At the same time, the restart of the company's operations in Ukraine was difficult. There were product shortages and supply disruptions, which led to significant losses for the global automotive industry. Leoni managed to organize work in several shifts, taking into account the curfew. Access to bomb shelters was also organized, which can be reached from the workshops in less than 15 minutes. All of the above helped the company to survive and remain the largest supplier of automotive cables in 2022.
In Zhytomyr and Lutsk, there are factories owned by the German company Kromberg & Schubert. They manufacture electrical onboard cable systems for BMW, Audi, Mercedes, and Volkswagen vehicles.
According to Vitaliy Bunechko, head of the Zhytomyr Oblast military administration, this company was created with the participation of a foreign investor and is part of a global team with companies in many countries around the world – Austria, Germany, Poland, Romania, Macedonia, and China. The plant began to resume operations in May 2022.
This manufacturer has three plants in Ukraine: in Peremyshliany, Zolochiv, and Brody in Lviv Oblast. Elektrokontakt Ukraine is a division of the German company Elektrokontakt GmbH. The latter belongs to the well-known French concern Nexans.
The plant produces wiring harnesses for Opel, BMW, Porsche, Audi, and Mercedes.
The Japanese company specializing in the manufacture of cable products for Volkswagen Group vehicles (Porsche and MAN) had production facilities in Ukraine – in Lviv and Vinnytsia Oblast.
However, Russia's war waged on Ukraine disrupted global supply chains and forced the Japanese to move production to Morocco. According to Ukrainian experts from the Automotive Market Research Institute, the transfer of production to other countries may be a hasty decision. Most of the supplying plants for the European automotive industry are located in areas where there are no active hostilities.
This enterprise is a joint project of two large companies that sew car seat covers for well-known brands. Bader GmbH specializes in leather covers, and Aunde specializes in the same products, but made of fabric.
Among the company's clients are even the American Tesla, premium Maybach, Lamborghini, Porsche, Mercedes, and many car brands of the more mass segment. In Ukraine, Bader partially suspended its operations, but since March 2022, it has resumed work in Kozhychi and Chervonohrad in Lviv Oblast.
Sebn manufactures electrical cable products for Volkswagen Group vehicles. The company has three plants in Ukraine. They resumed operations in Chernivtsi and Ternopil oblasts in February 2022 after a short break.
A plant of the German company Kostal operates in Pereiaslav-Khmelnytskyi, Kyiv Oblast. It produces automotive electronics (steering columns, switches, contact systems). The company's clients include Audi, Ford, DAG, SEAT, Skoda, VW, Renault, Lamborghini, and BMW.
The company operates in Novyi Rozdil, Lviv Oblast, and recently celebrated its 20th anniversary. It produces cables for Volkswagen, BMW, Porsche, Volvo, Opel, magnetic coils, electromechanical structures for cars and motorized tools.
In February 2022, the Irish global technology company APTIV announced the launch of a Ukrainian plant for the production of electrical cable products for cars in Cherkasy. It was a new project for the company, but due to the war, the team decided to move parts from Ukraine to Aptiv's existing facilities in Poland, Romania, and Serbia.
While Ukrainian industries and companies have managed to adapt to the war and continue to look for new markets and logistics opportunities, the industry's rosy future is in doubt. Russia's invasion of Ukraine, in addition to problems with the supply of automotive components and the production of automotive electronics, has led to higher prices for metals used in car manufacturing. These include aluminum for body parts, palladium for catalysts, and nickel for batteries.
Together with rising energy prices, this situation could lead to higher costs of new cars and a decrease in their production. Used cars will also become more expensive. And globally, the prospect of a ban on cars with internal combustion engines (ICEs) adds to the belief that the automotive industry is facing tough times.