Suzuki’s factory in Hungary has suspended car exports to Russia and Ukraine due to the ongoing war between the two countries.
The Japanese car manufacturer exports approximately 10,000 vehicles from its Hungarian factory to Russia and Ukraine each year and will attempt to shift affected models to other markets so it isn’t forced to cut production. The Hungarian division of Suzuki sold 119,098 vehicles in 2020, 101,672 of which were for foreign markets.
Spokeswoman Zsuzsanna Bonnar-Csonka revealed that the car manufacturer is continuing to encounter supply chain issues and noted that rising energy costs and the weakening of the Hungarian Forint were also of concern, Reuters reports.
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“Our company has no direct Tier 1 suppliers in the areas affected,” Bonnar-Csonka said. “However, we are continuously monitoring the entire supply chain. We are doing our utmost to optimize our manufacturing costs. However, after a certain point, we need to reflect part of these additional costs in new car prices.”
News of Suzuki’s decision in Hungary comes shortly after Volkswagen Group chief executive Herbert Diess suggested that a prolonged war in Ukraine would be worse for the European economies than the COVID-19 pandemic and the semiconductor shortage. Diess stated that interruptions to global supply chains “could lead to huge price increases, scarcity of energy, and inflation.”
“For a society like Germany, depending on Russian energy, raw materials… if you imagine a scenario where we cut off business relations with Russia, which we probably would have to do if this conflict [does not cease], you could not buy energy anymore and this would lead to a situation that might impact Europe and Germany considerably,” Diess said.
