Berlin – What's in store for our economy? Germany's most important industry, the automotive sector (727,000 jobs), is facing a crisis! The reason: a chip dispute between the US and China. Suddenly, there's a threat of a shortage of miniature components, dozens of which are needed in every car.
▶︎ Volkswagen, Europe's largest automaker, is preparing to halt production and introduce short-time work, as BILD has learned from supplier industry sources. The first line to be halted could be the production line at the main plant in Wolfsburg, where the Golf and Tiguan are built.
A VW spokesperson explained that the shutdown was planned due to a regular inventory. However, management sources said the inventory was brought forward to conserve chip stocks. However, BILD learned that production could be halted for a longer period starting as early as next week.
The trigger for the misery at Europe's largest automaker is a dispute over chip manufacturer Nexperia.
The former Philips spin-off, headquartered in Nijmegen with production facilities in Hamburg and China, had been part of the Chinese technology group Wingtech since 2019. Under pressure from the US, the Netherlands took control of Nexperia – which caused resentment in China.
Europe-wide crisis threatens
Beijing reacted by banning the export of parts from the People's Republic. Since then, chip production at Nexperia has been partially suspended. Nexperia produces billions of chips annually—in industry jargon, they're called"chicken feed" because of their massive use. And that supply is now running out, as Nexperia is currently leading the way for automakers.
The entire supply chain of the German auto industry will therefore be affected in 10 to 20 days, as BILD learned. It could take months for normality to return! Production stoppages are possible, and"a Europe-wide crisis" is looming. The US could also be affected in the end!
Car association has been warning for days
According to the German Automobile Association (VDA), automobile manufacturers and suppliers received a notice from chip manufacturer Nexperia as early as October 10. It stated that the company"can no longer fully guarantee the supply of its chips to the automotive supply chain."
VDA President Hildegard Müller warns: "The situation could lead to significant production restrictions, possibly even production stoppages, in the near future if the disruption in the supply of Nexperia chips cannot be resolved in the short term."
This means that all German car manufacturers could soon be affected! BMW and Mercedes announced that they are closely analyzing the situation. They did not provide any details.
A production stoppage would be catastrophic for the VW Group. The company is facing significant challenges due to the decline in its key markets, China and the US, as well as high investments in its products and technologies. Chief Financial Officer Arno Antlitz (55) recently warned internally that VW would need eleven billion euros for the coming year alone. Otherwise, the investments could not be realized.
Crisis threatens not only the automotive industry
Automotive expert Ferdinand Dudenhöffer (CAR Institute) told BILD:"Nexperia doesn't make technology-leading chips, but rather cheap, mass-produced goods. This isn't Nvidia or Qualcomm; they produce simple chips, for example, to open and close car doors." The company builds very large volumes, relies on economies of scale, and is therefore the market leader.
According to Dudenhöffer, the chip crisis could affect all car manufacturers—but not only them: This type of chip could also be found"in coffee machines, washing machines, and TVs."
