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Volvo Cars and Volkswagen warned that there might be temporary plant shutdowns in Europe as a result of supply chain disruptions caused by a battle between China and the Netherlands over control of chipmaker Nexperia.
Nexperia also notified Japanese auto parts manufacturers that it may not be able to guarantee supply as car executives urged for a diplomatic solution to fend off a bigger hit to the global industry.
“We are aware that this situation could have a serious impact on the global production of our members,” the Japan Automobile Manufacturers Association said. “We hope that each country involved will reach a prompt and realistic solution.”
Volvo Cars chief executive Håkan Samuelsson said the Swedish group, which is owned by China’s Geely, was not seeing any immediate problems and was applying lessons learned from chip shortages in the pandemic to communicate with its suppliers.
However, he noted the impact could be bigger for others in the industry. “I think there will be some factories shut down,” Samuelsson said in an interview on Thursday. “You always have to be a bit smarter than the rest of the pack so you are not the one that has to shut down the factory.”
Earlier this month, the Dutch government took management control of Nexperia, which makes basic chips that are widely used in electronic systems in cars and control everything from lighting and airbag systems to locks and windows. It was sold to a Chinese consortium in 2017 before being bought by Chinese group Wingtech.
Volkswagen issued an internal memo to staff on Wednesday, acknowledging that production could be affected in the short term, according to a spokesperson.
Mercedes-Benz said it had secured supplies for the short term, but added: “Due to the high degree of complexity and volatility, it is difficult to make reliable forecasts at this point in time.”
Mary Barra, General Motors chief executive, also told investors that the situation was “very fluid” with “teams working around the clock”, but said she was hopeful that governments would resolve the issue.
Renault finance chief Duncan Minto told analysts on Thursday that the French carmaker has not experienced any impact on production related to the Nexperia chip shortages, and had learned how to better manage supplies since the pandemic.
The Nexperia chip shortages are also hitting Chinese customers, with several distributors in the country saying they hadn’t received stock from Nexperia for more than 10 days. “We’re getting calls from lots of customers who are desperate, but we don’t have any to sell,” said a salesperson at Mornsun Electronics.
The stand-off between Nexperia China and the global company has continued, with the China unit this week telling local staff they could ignore instructions from Dutch headquarters.
Nexperia headquarters has also emailed Chinese customers in recent days to “strongly advise” against accepting products delivered by its China unit. The Dutch company said it could no longer guarantee the quality and specifications of products from its Dongguan factory.
The China unit fired back with its own letter to customers accusing the Netherlands team of “raising groundless doubt on product compliance” and insisting its business was “proceeding in an orderly manner”.
Chinese commerce minister Wang Wentao on Tuesday urged the Dutch economic minister to “resolve the issue promptly and properly”, calling for Wingtech’s interests and contract to be upheld. Wang is set to travel to Brussels in coming days to discuss the Nexperia stand-off and rare earth controls with European officials.
Additional reporting by Harry Dempsey in Tokyo
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