The war in the Ukraine is unlikely to impact the servicing and maintenance of the UK’s vehicle parc in the near short term, but there are concerns of potential higher vehicle repair costs and even an impact on costs of electric vehicles.

MD Vincent St Claire said Fleet Assist is closely monitoring the situation on parts availability through close communication with franchised and independent dealer networks and parts suppliers

While there appears to be little impact on the supply chain logistics for fast-moving parts at present, Fleet Assist says costs are likely to increase which will translate into higher repair costs over the coming months.

The business, a specialist in supply chain management for leasing and rental firms, said it’s closely monitoring the supply chain in respect to parts availability through close communication with franchised and independent dealer networks and parts suppliers.

“We are in regular dialogue with all elements of the supply chain to ensure we keep customers informed so they can consider any tactical changes required to mitigate a potential impact on drivers,” said Vincent St Claire, Fleet Assist’s managing director.

There are also concerns that the crisis could trigger a second chip crisis, following the pandemic, while the conflict also continues to hit new car production.

“It is understood the main Ukrainian parts industry comprises vehicle wiring looms and gas production that supports the manufacture of semiconductors. This is going to cause issues with the supply of major components supplied to many vehicle manufacturers which will impact new vehicle production,” explained  St Claire added.

A halt on production

Meanwhile, new vehicle production is being halted or cut back in some of Europe’s plants either due to closures or restricted production at Ukraine’s parts manufacturers.

Carmakers impacted include BMW Group, Groupe Renault, Jaguar Land Rover, Stellantis and the Volkswagen Group.

Already, Mini has closed its Cowley factory in Oxford due to disruption from the conflict and a hiatus in chip supplies. Its assembly line shutdown is expected to last until Friday 18 March.

The Volkswagen Group also announced last week that it was stopping the production of vehicles in Russia until further notice, affecting the Russian production sites in Kaluga and Nizhny Novgorod. It also said that vehicle exports to Russia had been stopped with immediate effect.

Ford has also suspended its joint venture operations in Russia until further notice.

The carmaker said: “As part of the global community, Ford is deeply concerned about the invasion of Ukraine and the resultant threats to peace and stability. The situation has compelled us to reassess our operations in Russia. In recent years, Ford has significantly wound down its Russian operations, which now focus exclusively on commercial van manufacturing and Russian sales through a minority interest in the Sollers Ford joint venture. Given the situation, we have today informed our JV partners that we are suspending our operations in Russia, effective immediately, until further notice.”

As with many carmakers, it’s also donated to humanitarian efforts; the Ford Fund has given a $100,000 donation to the Global Giving Ukraine Relief Fund for humanitarian aid to assist Ukrainian citizens and families who have been displaced during this crisis.

A shift in the switch to e-mobility?

As Europe looks to ditch Russian oil and gas, there has been much conjecture over whether there will be a faster transition from ICE to BEV technology.

It’s a topic that’s come under focus by LMC Automotive; an automotive focused global forecasting and market intelligence service.

A new blog by Al Bedwell, director, global powertrain, says that a faster shift from internal combustion engines (ICE) to battery electric vehicles (BEV) cuts dependency on oil but replacing imported Russian oil with alternatives in the medium term is hard, though not impossible.

Meanwhile, the cost of BEVs may well increase as battery raw material costs – nickel in particular – surge. This in turn could dampen or halt OEM plans to reduce BEV prices and may even put them into reverse.

Bedwell adds: “The argument goes that steeply rising road fuel prices will persuade people to reject combustion cars and switch to BEVs more quickly. If the fuel price hike were happening in isolation, we’d be revising our BEV forecast upward right now. But we are going to wait and see how the situation develops. Yes, the cost of ownership for combustion cars will increase, but that may be offset to some extent by reduced trips where possible. At the same time, a widening acquisition cost gap between ICE and BEV may dampen enthusiasm for going electric. It is one thing having to find a few more tens of euros to fill the tank, but quite another having to find several thousand more than expected to finance a BEV.”

To read more of LMC Automotive’s commentary on this, click here.