Suzuki Hungary has announced that it has stopped the exportation of cars to both Russia and Ukraine, adding to the list of war-related happenings in the auto industry. According to a report by Reuters, this is the first sign of a broader economic effect of the current conflict.
The announcement came amid the ongoing invasion of Russia on Ukraine. Central Europe is currently experiencing a so-called economic fallout as a result of the war. Harsh Western sanctions on Russia were imposed due to its aggression, while economic turmoil has intensified on both nations as a result of the conflict.
The conflict, however, seems to have no effect on Suzuki Hungary's production.
"Our company has no direct Tier 1 suppliers in the areas affected," spokesperson Zsuzsanna Bonnar-Csonka told Reuters. "However, we are continuously monitoring the entire supply chain."
Bonnar-Csonka added that the global chip shortage is still the biggest problem in Suzuki Hungary's production. Rising energy costs and the weakening of the country's currency both contribute to the hurdles that Suzuki Hungary is facing.
Suzuki Hungary exports 10,000 cars per year to both Russia and Ukraine. In order to offset the deficit caused by the suspension of exportation, Suzuki plans to shift the affected orders to other markets.
In 2020, Suzuki Hungary sold nearly 120,000 cars in 2020. Around 100,000 of that were sold to foreign markets, which means Russia and Ukraine contribute to around a tenth of the factory's exports.
As of this writing, the conflict between Russia and Ukraine has already sparked reactions from various automakers. Some have expressed their support by donating millions of euros to relief operations, while a number have halted their operations. Russia's Lada has recently stopped production due to a lack of supplies as a result of the war.