Volkswagen's Operations Threatened by China-Netherlands Chip Standoff

Volkswagen's main plant operations are currently unaffected despite potential chip shortages due to China-Netherlands tensions over Nexperia. Europe’s carmakers, including Volkswagen, are on alert as China bans Nexperia exports. Suppliers like Infineon and NXP may provide alternatives, although approval processes could cause delays.

Production at Volkswagen's main plant is set to continue in the coming week, despite concerns over potential waves of shortages caused by a dispute involving chipmaker Nexperia, according to an informed source. The situation, however, may change with the coming German public holiday, leading to uncertainty beyond the upcoming work week.

Volkswagen, for now, has no plans to initiate a state-backed reduced hours scheme at its Wolfsburg plant, although discussions with Germany's labor agency have been precautionary. The world's carmakers remain vigilant about possible interruptions, with China's export bans on Nexperia products impacting the supply chains of Volkswagen, BMW, and Mercedes.

Beijing imposed these restrictions following the Dutch government's control over Nexperia due to intellectual property concerns related to its Chinese owner, Wingtech, previously flagged by the U.S. over national security risks. Despite the chip shortage threat, alternatives like Infineon and NXP are under consideration, though transition could face delays due to necessary approvals.

(With inputs from agencies.)