DETROIT – The war in Ukraine is expected to lower global light-duty vehicle production through next year by millions of units, according to S&P Global Mobility.

On Wednesday, IHS Markit (formerly IHS Markit) downgraded its global light vehicle production forecasts for 2022-2023 by 2.6 Million units to 81.6M units in 2022, and 88.5M units in 2023.

This conflict caused supply and logistical problems, as well parts shortages. of critical vehicle components.Many automakers import wire harnesses from Ukraine, which is used to power electrical current and communicate between different parts. Due to the continuing shortage of silicon chips and the coronavirus epidemic, these problems will further strain an already stretched supply chain.

European auto production is expected to experience the most disruption, according to S&P. According to S&P, the firm reduced the forecast by 1.7 million units for Europe. This includes just under 1,000,000 units because of lost demand in Russia or Ukraine. Rest of the reductions are made from parts shortages involving chipsWar-related damage to wiring harnesses

That compares to S&P cutting its North America light-duty vehicle production by 480,000 units for 2022 and by 549,000 units for 2023.

About 45% of Ukraine-built wiring harnesses are normally exported to Germany and Poland, placing German carmakers at high exposure, according to S&P. Automotive companies such as VolkswagenAnd BMWThey have been the hardest hit since Russia invaded Ukraine three weeks ago.

Herbert Diess, Volkswagen CEO, stated earlier in the week that the conflict has questioned the company’s outlook for 2022. The war is causing parts issues and has led to the loss of Volkswagen’s future plans. As a response to the crisis, Diess stated that some production was being moved from Europe to North America and China. war-related supply-chain disruptions.

Due to the ongoing Ukraine crisis, BMW’s 2022 profit margin prediction was cut by 8%-10% to 7-9% on Wednesday.

Frank Weber, chief technology officer at BMW, stated that BMW’s production plants would be fully operational next week after it stopped or reduced production in some German plants following the invasion.

Weber stated that the company worked closely with suppliers in order to replicate, and not move, wire harnessing production, to try to preserve jobs.

Weber stated Wednesday, during a roundtable discussion via remote that “When you take a look at Ukraine this wire harnessing sector gives work to perhaps 20,000 people.” Weber said, “We weren’t just trying to remove the work.”

In total, S&P on Wednesday said it removed nearly 25 million units from global light-duty vehicle production from its forecast between now and 2030.