Nicholas Takahashi, Bloomberg News
Automakers around the world are planning production cuts after an export freeze by a Dutch-based Chinese semiconductor company threatens to disrupt the industry's supply chains.
Honda Motor Co. said it had cut or suspended production at some North American factories this week as it counters a chip shortage that comes as China blocks Nexperia BV, owned by China's Wingtech Technology Co., from exporting products made at its local factories. This was a retaliatory move after the Dutch government took control of Nexperia under emergency powers to protect strategic production.
Honda is halving production at its plant in Canada, where it makes Civic sedans and CR-V SUVs, and its plant in Mexico was closed on Tuesday, company officials said.
European automakers may have to halt production within days, the industry's main lobby group warned in a statement on Wednesday. The continent's automakers are relying on dwindling reserves to prevent plant closures, according to the European Automobile Manufacturers Association. Germany's Mercedes-Benz Group AG has enough Nexperia chips for the short term, the luxury car maker said on Wednesday.
Volkswagen AG on Thursday warned it would need enough supply of semiconductors to meet its financial goals this year, adding to problems for Europe's largest automaker. While the Audi and Seat owner has secured enough components for the coming week to keep its German factories running, it cannot rule out other production disruptions.
The automaker could see operating profit, excluding provisions, in the upper range of 2% to 3% for the year, Chief Financial Officer Arno Antlitz said on a call with analysts. He added that net cash flow from the auto industry, a key indicator of financial health, could also be positive.
Separately in Germany, Aumovio SE – the auto parts maker spun out of Continental AG this year – said on Thursday it was preparing for the possibility of short-term work at its Willingen plant due to chip supply bottlenecks.
In the US, the Engine and Equipment Manufacturers Association said US auto plants would be weeks away from a “significant impact” on vehicle production if the dispute with Nexperia is not resolved.
Nexperia makes semiconductors used in vehicle control systems for functions such as activating windshield wipers and opening windows.
The spat comes amid a broader trade dispute that has seen China tighten export requirements for rare earths and battery materials critical to electric vehicles. Xi Jinping and Donald Trump met on Thursday for bilateral talks, raising hopes of an agreement between the two countries that would restore global supply chains for everything from furniture to chips.
Meanwhile, Wingtech said the Dutch government's “ill-judged” intervention had damaged Nexperia's operations and warned the dispute could harm the company's European business.
“Only by restoring full control and ownership rights to the company's legitimate shareholders and management, and ending political interference in corporate governance, will the Dutch government be able to repair the damage to its reputation, reduce international tensions and protect European economic security,” a Wingtech spokesman said in an emailed statement.
CEO of Ford Motor Co. Jim Farley called the conflict with Nexperia a “political” issue and said he raised it with government officials last week during a trip to Washington.
General Motors CEO Mary Barra told investors that the chip restrictions “could impact production,” and Stellantis NV said in a statement that it was “working with Nexperia and other suppliers to assess the potential impacts and develop mitigation measures.”
Toyota Motor Corp., the world's largest automaker, said the suspension of Nexperia exports had a limited impact on production. “Toyota hasn't suffered much at this point,” Chief Executive Officer Koji Sato said Wednesday. Still, he said it's a risk, adding that “it's just one of the big elements that we face every day.”
At Nissan Motor Co. The supplies will last until the first week of November, productivity director Guillaume Cartier said on Wednesday.
“It's not a small problem,” Cartier told reporters at the Tokyo auto show. He added that Nissan is aware of the short-term impact on its largest suppliers, but has not yet assessed the severity of the impact further down the supply chain.
(With assistance from Stefan Nicola, Monica Raymunt and William Wilkes.)
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