Local auto shops prepare for impact of supply issues from Russia-Ukraine conflict

Auto Shop Extended Warranties mechanic
Posted at 5:54 PM, Mar 07, 2022
and last updated 2022-03-07 19:51:37-05

HAMPTON ROADS, Va. - A big concern for auto shops within Hampton Roads is where to quickly find replacement parts due to new supply issues because of the conflict between Russia and Ukraine.

One local auto shop operator is throwing the caution flag to potential customers.

Auto shop owners at Total Car Care tell us Ukraine and Russia produce a great deal of the raw materials needed for batteries and other important parts for electric vehicles. So, people looking for a new car may want to think about the potential impact of that purchase, especially when it comes to shops having a shortage of parts for certain vehicles.

As the war rages, here at home there are growing concerns about how this will impact the automotive industry.

"Very quickly they have to face the reality that these widening harnesses have to be made somewhere else and not Ukraine," Ram Gansehan, business professor at William and Mary, said.

Auto shop owners like Robert Hopson are already preparing for the challenges ahead.

"It affects the bottom line of the automotive industry and it also affects the customer who wants to buy that electric car," Hopson, owner of Total Car Care said.

According to Gansehan, Ukraine and Russia both produce commodities like aluminum. They also produce raw materials like nickel and lithium, causing Hopson to ponder the price hikes.

"In the next upcoming months there will be some pivoting and some changes that are going to occur from the backlash," Hopson said.

Now hard decisions are being made whether to swallow the added cost or pass it on to consumers at a time when prices for new vehicles are already running record levels.

"Consumers can see a 25-35 percent increase in repairs," Hopson said.

"Where most of us are going to feel this is palladium, a metal called palladium and Russia really makes some very large palladium production in the world and it's used to make semiconductors," said Ganeshan.

Ganeshan says it's used to make semiconductors, but with ongoing supply chain issues and now the invasion, it has made matters worse for auto shops dealing with the semiconductor chip shortage. Many new cars will sit in fields and parking lots waiting for chips.

"What this will do is have companies start thinking about diversifying their sources and trying to plan for such destruction," Ganeshan said.

Car and business experts say for now their best advice for families looking for new cars is to order and look early before supply issues could see a heavier impact.