(NewsNation) — The conflict in Ukraine is sending the automotive industry plunging into yet another supply chain crisis.
Carmakers have struggled through the past two years. First a pandemic, then a chip shortage — and now, new sanctions are shutting down critical industry suppliers and prompting car manufacturers to halt Russian factories and sales.
Ivan Drury, senior manager of insights for Edmonds, said the industry faces several roadblocks. Palladium, a key component for semiconductors used in vehicles, is hitting an all-time high over concerns companies won’t be able to export it from Russia.
“It is going to hinder even more production for more automakers … more components … wiring harnesses. I mean, there’s so much that’s manufactured around the world,” Drury said.
Automakers including Toyota, Ford, BMW, Mercedes-Benz and Hyundai have closed their Russian plants. The outcome is a blow where consumers have already been hit hard. Auto prices increased 12% from January 2021 to January of 2022. Trends signal the sticker shock is going to get even worse.
“A lot of people think, hey, ‘I’m going to go negotiate we’re going to try to work away … the dealer’s asking prices.’ But nowadays, because it is so difficult to find that piece of inventory that you want, dealers are operating with something like 80-90% reductions in inventory. You’re going to find a lot of times, the price you see is the price you’re going to pay,” Drury said.
And with gas prices hitting record highs nationwide, many are now eyeing electric vehicles as a way to avoid the pump.