At the heart of the problem lies a ‘decidedly unsexy’ automotive part known as the wiring harness, the group said in an analysis this week.
Ukraine manufactures a large portion of Europe’s wiring harnesses and, because of the crisis, those components are either not being produced, or cannot be exported. Jacks said that the share prices of European car manufacturers appear to be factoring in a 10% drop in revenues for the next year. Europe’s car manufacturers are facing another bleak season. VW and BMW have already halted production at some plants, and others will likely follow.European car brands will be hit the hardest by the wiring-harness shortage, while some Asian car brands might be largely unaffected, said Cars.co.za.
“Luxury cars, with high-technology, will likely suffer the most and South Africa’s top-selling luxury brands – BMW, Mercedes Benz and Audi – are European,” the group said. “The result was that there were more buyers chasing fewer cars. Inevitably, that pushed prices up. These are strong forces – the normal trend over a two-year period would be for like-for-like prices to drop by around 10% – instead, they have risen by that percentage.”