The heads of Volkswagen Group's premium brands spoke at length on Wednesday about the impacts of Russia's invasion of Ukraine, as well as the ongoing microchip shortage, and how it has affected their operations.

Audi CEO Markus Duesmann said the group had lost a substantial amount of wire harness production in Ukraine that was needed to keep assembly plants running — but amazingly, not all of it.

"Many of our suppliers, especially for wiring harnesses, were in Ukraine, or are in Ukraine. They are desperately — even with the people staying there, which is incredible — trying to produce, and doing so always close to a bomb shelter," Duesmann said stoically. "They try to produce, which is an enormous achievement [for] a really proud and brave people there."  

He said the group has tried to adjust by boosting production of wire harnesses in Romania, Hungary, Tunisia and Morocco, as well as in Mexico and China "to compensate for the volume losses we do have in Ukraine. We think within the next few weeks, we will be up to full volume, and then the situation might ease, I think, in the second half of this year, depending on how the war develops."

The VW Group roundtable Wednesday took place without any theatrics or fanfare out of respect for the serious situation in Ukraine, which Duesmann said should make every company in Europe and elsewhere consider the source of the energy supplying their factories and powering their products.

"The war in Ukraine leaves little room to think about anything else at the moment. We really hope for a stop of hostilities and a return to diplomacy. We need to come to a sustainable solution, based on international law," he said. "This war forces us to look into, where does the energy come from? And certainly this will force us and accelerate the processes to discuss also where we get our energy from, because we need to save production, and certainly we will review that as well."

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