PRAGUE (Reuters) – Skoda Auto (part of the Volkswagen (DE:) Group) stated Tuesday that its Ukrainian supplier had agreed to restart the production of wire harnesses. This should enable the Czech carmaker ENYAQ iV to resume production.

Russia’s invasion in Ukraine created supply chain problems for global automobile manufacturers. They were already facing shortages of semiconductors and had to cut production. This has resulted in a reduction of wire harnesses coming from this war-torn nation.

Skoda is the Czech Republic’s largest exporter of semiconductors. However, Skoda stated that the supply of semiconductors should improve over the second half 2022. It also said that the conflict in Ukraine and the supply shortages would have a major impact on the Czech Republic’s operating businesses.

Skoda lost 12.6% in 2021 sales year-on-year. Earlier this month, Skoda stopped producing the ENYAQ due to harness shortages. It also stated that the ENYAQ was at high risk for two models because it is not available.

“Our partner…in Ukraine decided that we would restart production wire harnesses this Week, with full service, and complete security for workers there,” Karsten Scheke, Skoda’s board member responsible for purchasing, stated during the online 2021 earnings presentation.

The key component of an automobile’s electric system is the wire harnesses. They are used to group cables and direct them inside.

Schnake stated that they decided to increase production by doubling it in the event of an error. Work there will begin in about three to four weeks.

Schnake indicated that he hoped to restart ENYAQ’s production once we had wire harnesses.

Skoda shipped 878,200 vehicles worldwide in 2021. This was the first time this number has fallen below 1,000,000 since 2013.

However, sales revenue for the VW brand rose 3.9% ($19.5billion) to 17.7billion euros in 2021. Operating profits rose 43.2% (to 1.1billion euros) as cost reductions were taken into account.

Skoda didn’t give any financial or production outlook. She stated that there were still significant uncertainties due to the conflict in Ukraine as well as the effect on Russia operations.

Skoda and VW have both suspended production in Russia. Russia is Skoda’s second-largest customer, having delivered 90,400 vehicles last year.

($1 = 0.9089 euros)