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Russia’s invasion of Ukraine has shut down car factories in Eastern Europe and raised prices


The crisis has led to the closure of factories in Eastern Europe and has led to rising commodity prices.

Some factories in Ukraine tried to continue their activities amid the invasion, and workers were forced to stop working to escape rocket attacks.

In March, S&P Global Mobility, formerly IHS Markit, reduced its global car production estimate by 2.6 million vehicles in both 2022 and 2023 due to the conflict.

The worst case scenario is a loss of production of up to 4 million vehicles.

European car production is expected to fall by about 9% – about 1 million cars. Part of this decline will be directly caused by the loss of car sales in Russia and Ukraine, but these countries together form a small share of the global car market – about 2% of the total in 2021.

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The biggest concern is the lack of materials and parts, which are already affecting European carmakers and, the report warns, could spread to other markets if the war continues.

Separately, S&P Global Ratings analysts also predict that in 2022 global car sales will fall by 2% from 2021.

This is a significant decrease from the 4% -6% increase in sales for 2022, which the group had last anticipated in October 2021.

The report highlighted disruptions in the supply of critical car parts in the region, especially wiring in Ukraine.

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Manufacturers are also at risk of a shortage of raw materials – Russia produces about 40 percent of the world’s palladium – which is used to clean vehicle exhaust.

The region is also a producer of nickel, which is used in electric vehicle batteries.

Even common minerals and metals, such as iron, are affected. All these are key materials used in the manufacture of machines.

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