Germany’s largest carmaker Volkswagen (VW) is once again facing major disruptions to its production lines. According to industry sources, the group is preparing to halt assembly of key models, including the Golf and Tiguan, due to a severe shortage of semiconductors.
The chip crisis, which has plagued the automotive industry since the pandemic, has flared up again — this time triggered by a political dispute surrounding the semiconductor manufacturer Nexperia.
Semiconductor dispute between China and the Netherlands
On September 30, the Dutch government, acting under U.S. pressure, took control of Nexperia, a company owned by the Chinese technology group Wingtech. In response, China imposed export restrictions on certain semiconductor components, partially halting Nexperia’s production.
While Nexperia does not sell chips directly to automakers, its semiconductors are integrated into components supplied by Tier-1 suppliers to manufacturers like VW, Mercedes, and BMW.
According to sources close to the company, Volkswagen still has enough stock to maintain production through this week, but shortages are expected to hit next week, potentially forcing temporary shutdowns at several plants.
Production stoppage could cost billions
A production standstill would be a heavy blow for Volkswagen, already under strain from slumping sales in China and the U.S., coupled with massive investment demands in electric mobility and digitalisation.
Chief financial officer Arno Antlitz (55) reportedly warned internally that VW will need €11 billion in liquidity for 2026 to meet its investment plans. Without this, the company risks delaying crucial projects in its electrification and software divisions.
VW is seeking to sell non-core assets and boost revenue through higher vehicle sales, but the renewed chip shortage threatens those recovery goals.
Company in talks over short-time work
Volkswagen has already contacted Germany’s Federal Employment Agency to prepare for short-time work (Kurzarbeit) for parts of its workforce. Initially, several thousand employees could be affected, insiders said — but that number could rise to tens of thousands if the shortage continues.
“The situation in the semiconductor market is being monitored closely,” a company spokesperson said. “For the short term, production remains secured, but the outlook beyond that depends on supply chain developments.”
No quick solution in sight
This is not Volkswagen’s first brush with semiconductor chaos. During the COVID-19 pandemic, the global chip supply chain collapsed, forcing automakers to halt or delay production. VW, like its rivals Mercedes and BMW, has since diversified its supplier network.
However, for specific chip types produced by Nexperia, there are no viable alternative manufacturers, experts warn. That makes the current bottleneck particularly difficult to resolve.
If the geopolitical dispute persists, analysts believe Europe’s entire automotive sector could face another wave of production losses, adding fresh pressure to an industry already balancing on thin margins.
