Volkswagen, European Automakers Face Production Cuts Amid China Chip Export Ban

A semiconductor chip shortage driven by geopolitical tensions has severely disrupted the European automotive industry, with Nexperia's Dutch headquarters seized and China suspending exports from its factories. Volkswagen, a key player in Europe's auto market, faces imminent production halts, with chip supplies secured only until the end of next week, affecting popular models like the Golf and Tiguan. This shortage has compelled major suppliers such as ZF Friedrichshafen and Bosch to reduce shifts and working hours, impacting electric drivetrain production critical to automakers including Mercedes-Benz and Ford. Financially, Volkswagen has reported significant losses exacerbated by U.S. tariffs and disruptions at Porsche, with operating profit margins downgraded and profit targets at risk if the chip crisis persists. Industry bodies warn assembly line stoppages are imminent, underscoring the political nature of the shortage and the urgent need for diplomatic solutions. Despite cost-cutting and new model launches aiming to offset demand slumps in China, Volkswagen's outlook remains uncertain, highlighting the broader vulnerability of the global automotive supply chain to semiconductor availability.