VOW Volkswagen AG

After a series of attacks on cargo ships in the Red Sea, most shipping companies have rerouted ships, resulting in disruptions in trade flows and delivery.

As a result of gaps in its supply chain, U.S. car maker Tesla reported earlier Friday that it would stop production at its German factory near Berlin for a two-week period starting Jan. 29.

A number of companies including car makers Renault and Mercedes-Benz, fashion company H&M and chip manufacturer Infineon said they are monitoring the situation, while other companies provided further information regarding the disruption:

-- Siemens: The German technology conglomerate said it is seeing some restriction in its supply chains and is working with suppliers on alternatives to cope with potential bottlenecks.

--Volvo Cars: The Swedish-Chinese car maker said it would pause production at a Belgium factory because of supply-chain delays caused by the conflict in the Red Sea. The company said it would stop production at its Ghent plant for three days due to a delayed delivery of gearboxes. "However, as of now, we see no impact on our ability to reach global retail sales deliveries or production plans," a spokesperson said.

-- Volkswagen: The German auto manufacturer's namesake brand doesn't envision any major production restrictions as a result of the Red Sea situation. "Volkswagen is in close coordination with the shipping companies and is monitoring the situation closely in order to assess the impact on production and market supply and--as far as possible--avoid it," a spokesman said, adding that rerouting shipments ensures that freight reaches its destination despite a slight delay.

-- Continental: The German auto parts maker said it has been affected and is monitoring the situation with its suppliers. "We are currently compensating for delivery delays by using alternative supply sources, transportation options as well as our inventory," a spokesman said.

-- Stellantis: The Netherlands-based Jeep and Dodge maker said it has used planes to transport supplies on a limited basis to compensate for shipping delays, and that effects on its manufacturing abilities have been nearly non-existent.

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(END) Dow Jones Newswires

January 12, 2024 11:46 ET (16:46 GMT)

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