Volkswagen CEO warns war could have "very much worse" impact on economy than COVID-19

The interruption to global supply chains

could lead to huge price increases, scarcity of energy and inflation,

CEO Herbert Diess told the newspaper.

The German automaker's head also said Europe faces huge threat of higher inflation from prolonged conflict in Ukraine.

Volkswagen did not immediately respond to a Reuters request for comment.

Carmakers, including Volkswagen, BMW and Porsche, are struggling to obtain crucial wire harnesses as suppliers in western Ukraine have been shuttered by the Russian invasion, forcing them to curtail production.

Earlier this month, Volkswagen halted its business in Russia, stopped vehicle exports to the country and suspended production at its Kaluga and Nizhny Novgorod sites.

Japan's Suzuki Motor Corp has suspended car exports to Russia and Ukraine from its Hungarian factory as of March due to the war, the Japanese company said on Wednesday, in one of the first signs of the conflict hitting the broader economy in the region.

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