The Valencian automotive industry, "prepared" for the possible effects of the Red Sea crisis

The crisis in the Red Sea, which this newspaper has been reporting on for weeks, is beginning to worry more and more sectors, and one of those that views its consequences with suspicion is the automotive industry.

Oliver Thansan
Oliver Thansan
11 January 2024 Thursday 21:35
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The Valencian automotive industry, "prepared" for the possible effects of the Red Sea crisis

The crisis in the Red Sea, which this newspaper has been reporting on for weeks, is beginning to worry more and more sectors, and one of those that views its consequences with suspicion is the automotive industry. The Valencian automotive and mobility cluster, AVIA, has confirmed this Friday that given this scenario, companies in the sector are "forewarned" and are living pending the conflict and are even "advancing their strategies" to alleviate the possible effects that it may have. cause this situation in the supply of components.

For the moment, most of the cluster's associated companies, around 120 located in the Valencian Community, have not been affected by the current situation in the Red Sea. The reason, they point out, is that many of the main supplies of auxiliary companies come via the Atlantic route.

"It is true that, if delays occur in the value chain and depending on how the conflict progresses, it is likely that supplies will be affected, given that logistics is global," they explain from the conglomerate of companies, which already suffered negative consequences due to the breakdown of supply chains as a result of the pandemic.

Multinationals such as Ford Valencia chained various ERTE due to the so-called component crisis, so the current scenario is not new for its auxiliary industry either. Likewise, they explain that the impact may come from delays in supplies and extension of times, which would cause an increase in prices.

The automotive sector is not the only one concerned about the effect of the crisis in the Middle East. Also this morning the Valencian Farmers Association, AVA-ASAJA, spoke along these lines. Cristóbal Aguado, president of this entity, argued this morning that although the impact "is not enormous" because a large volume of merchandise is not moved on that route, the situation could harm the trade of Valencian fruits and vegetables because the products , perishable, could arrive affected. "50 days in transit are not viable," he said. That is why, possibly, part of the product destined for those countries is diverted to other markets, he has confirmed.