Following the news that VW Group owned brand Skoda is planning to trim production of the Enyaq iV model due to a shortage of components supplied from Ukraine;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“The crisis in Ukraine will be causing disruption to economic activity in so many ways. Volkswagen Group’s global supplier network, which comprises more than 40,000 suppliers, also includes a number of suppliers in western Ukraine; Skoda is particularly vulnerable. VW Group procurement analysts will be hard at work assessing a fast-moving situation, quantifying risks and looking at alternative sourcing strategies.

“Besides the uncertain magnitude and duration of potential supply disruptions, GlobalData’s global light vehicle sales database also highlights the importance of the Russian vehicle market for the brand. 2021 data shows that Russia was Skoda’s second biggest market, after Germany.

“Skoda says production at its Russian plants is still running, but adds that ‘the impact of possible disruptions to the supply chains is being continuously analysed’.

“Besides supply chain worries, another big immediate concern will be the impact of economic sanctions on Russia and the collapse of Russia’s currency – which will decimate margins on vehicles sold there. A longer-term concern for Skoda – and indeed Volkswagen Group and many other vehicle makers – will undoubtedly be the state of the sales environment in Russia.”