Skoda says Ukraine supplier making wire harnesses again

PRAGUE -- Skoda said its supplier in Ukraine had decided to restart production of wire harnesses, which should allow the Czech automaker to resume production of its Enyaq full-electric SUV.

"Our partner in Ukraine decided to restart production of wire harnesses this week, with full service and full security for workers there," Karsten Schnake, Skoda's board member for purchasing, said during the automaker's online 2021 earnings presentation on Tuesday.

Skoda stopped production of the Enyaq earlier this month and said Scala and Kamiq output was also at risk because of the unavailability of wiring harnesses from Ukrainian suppliers.

Schnake said the automaker was also double sourcing wire harness supplies "in case something goes wrong" and an alternative production location will come on line in three to four weeks.

"Hopefully we can then restart Enyaq production when we have wire harnesses," Schnake said.

Wire harnesses form a key part of a car's electrical system, which group and guide cables inside the vehicle.

Skoda warned that the war in Ukraine and supply bottlenecks will put a significant burden on its operating business this year, although it expects the supply of semiconductors to improve in the second half.

Skoda delivered 878,200 cars worldwide in 2021, down 13 percent on 2020, and the first time that this had fallen below the 1 million mark since 2013, as the global chip shortage cut into production.

Nevertheless, the brand's sales revenue rose 3.9 percent to 17.7 billion euros ($19.5 billion) in 2021 and operating profit rose 43 percent to 1.1 billion euros as it took cost reduction measures.

Skoda, like VW, has suspended production and other business activities in Russia, which was its second-largest market last year, with 90,400 vehicles delivered.