Major flooding in Slovenia throughout the last month has affected manufacturing facilities and supply chains in Slovenia and across Europe, hitting the production of carmakers including Volkswagen.
The country is home to many tier-1 suppliers such as braking systems firm CIMOS, ignition systems supplier AET and seats provider TPV. According to Slovenia Business Development Agency, which is financed by the country’s Ministry of Economy and Tourism, not a single car is produced in Europe without at least one component being made in Slovenia.
Slovenia’s exports market is made up of Germany (33%), France (14%), Italy (7%), Croatia (6%) and Austria (4%), and the industry generated €4.1 billion in revenues last year.
As a result, the effects of the country’s worst ever natural disaster have spread across the continent. Volkswagen is cutting its production at German factories, as one of its suppliers for engine components is only able to deliver “to a limited extent”, according to the carmaker. In a statement to Automotive Logistics, a VW spokesperson said: “Effects are being made to fully resume production at this facility. In addition, the VW Group supports the onsite clean-up work with specialist personnel.”
The spokesperson added: “With the help of our worldwide supplier network, the availability of components has so far been secured. All departments of VW AG are working intensively to keep the possible effects to a minimum. However, in the course of September it is to be expected that not all component and vehicle plants will be able to be adequately supplied, so production losses are to be expected.”
At other VW factories in Portugal, Emden, Wolfsburg and Hannover, shifts will have to be cancelled or have short-time work in place due to the supply chain issues. VW Group recently said it is reorganising its procurement processes, specifically in electronic parts and semiconductors, to ensure supply over the long term and avoid risks of disruption or bottlenecks.
Key suppliers in the country that have facilities located in the flooded areas, according to Everstream Analytics, include Odelo, a tier-1 supplier for lighting, Starkom, a Mercedes-owned firm that provides chassis, and Akrapovic, an exhaust system supplier.
Tovarna Akumulatorskih Baterij (TAB), a major battery supplier for VW, Volvo and Daimler halted production and will need around 10 weeks to gradually restart production.
A KLS Ljubno factory, which supplies shaft rings and starter ring gears, was completely destroyed and will take months to be back in operation.
Recently, there have been shutdowns at GM and Toyota facilities (as reported on our sister site AMS) due to parts shortages and software system failures. The industry is further threatened by potential strikes against GM, Stellantis and Ford in the US.
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