German carmakers deal with fallout from Nexperia chip supply halt

German car manufacturers were on Wednesday dealing with the fallout from the interruption in supply at Dutch chip manufacturer Nexperia.

While Mercedes-Benz does not expect any short-term disruptions, Volkswagen is not ruling out short-term production restrictions.

“Currently, production is unaffected. However, given the dynamic situation, impacts on production in the short term cannot be ruled out,” Volkswagen said in an entry on the company’s intranet made available to dpa. A VW spokesman confirmed this upon request.

Volkswagen is already in discussions with the Federal Employment Agency about potentially placing several tens of thousands of employees on the subsidized furlough scheme known as short-time work. The company did not want to comment on this when asked.

On VW’s intranet, it only stated: “Volkswagen is in close contact with all relevant parties in light of the current situation to identify potential risks early and decide on necessary measures accordingly.” Information on new developments will be provided, it said.

Thanks to good cooperation with suppliers and lessons learned from the chip crisis, Mercedes-Benz is “secured in the short-term period,” it said on Wednesday in response to a request from dpa. “We are working intensively with our partners to close any potential gaps that may arise.”

Mercedes is closely monitoring developments, it said, but added that reliable forecasts are difficult to make at this point in time.

Nexperia is experiencing supply problems after the Dutch government took control of the company, which was previously managed by a Chinese parent corporation.

In response, China halted the export of Nexperia products, such as chips for the automotive industry.

The German Association of the Automotive Industry (VDA) warned on Tuesday of potential disruptions due to the issues at Nexperia, including production stoppages.

Volkswagen cuts 2025 guidance

Volkswagen reported a 1.3-billion-euro ($1.5-billion) first-half hit from tariffs and cut its full-year sales and profit margin forecasts in the German carmaker’s first assessment of the damage from U.S. President Donald Trump’s trade war.

Global automakers have booked billions of dollars of losses and some have issued profit warnings due to U.S. import tariffs. The European industry is also facing stiffening competition from China, and domestic regulations aimed at speeding up the electric vehicle transition.