Silence will once again fall over German car plants. From 29 October, Volkswagen will halt production of the Golf and Tiguan models in Wolfsburg, and the electric ID.3, ID.4 and ID.5 in Zwickau, where around 9,200 people work. Shorter shifts will be introduced, and thousands of employees could soon face reduced working hours.
The production stoppage stems from the sudden disruption in chip supplies from Nexperia, a key semiconductor supplier to the automotive industry. These tiny components are essential for the operation of core safety and control systems in vehicles.
The crisis erupted after the Dutch government took control of Nexperia, citing concerns about the transfer of technology to the company’s Chinese parent, Wingtech. In response, China imposed an export ban on selected semiconductor components, immediately stalling supply chains across Europe.
German media have described this as a textbook example of how geopolitics in real time can hit industry directly.
The effects of decisions in The Hague and Beijing
According to documents cited by Reuters, the actions of the Dutch government followed months of mounting pressure from the United States, which has long sought to limit China’s access to Western technology.
Nexperia, formerly part of the Dutch group Philips, was acquired in 2018 by China’s Wingtech for about $3.63 billion. It now accounts for roughly 40% of the global market for basic semiconductors, making it one of the pillars of Europe’s electronics industry.
In a statement, the European Automobile Manufacturers’ Association (ACEA) said that Nexperia had informed carmakers it could not guarantee chip supplies under the current circumstances.
“Without these chips, European suppliers are unable to produce components needed for vehicle manufacturing, threatening production disruptions,” ACEA warned.
The Automotive Innovation Alliance — which brings together most major carmakers in the United States, including General Motors, Ford, Toyota, Volkswagen, and Hyundai — has also raised the alarm.
“If automotive chip supplies are not quickly restored, vehicle production in the United States and many other countries will be disrupted,” warned John Bozzella, head of the American Alliance for Automotive Innovation.
Domino effect on the European market
Problems with Nexperia chip supplies have already hit Volkswagen’s German plants, and other factories are preparing for shutdowns. According to NDR and Bild, management is drawing up contingency plans for sites in Emden, Hanover, and Dresden. Only Osnabrück is expected to continue production without interruption.
The German government has held an urgent teleconference with representatives of the automotive and electronics industries to assess the scale of the threat. A spokesperson for the Federal Ministry for Economic Affairs said:
“The situation is serious and requires close cooperation with our European and Dutch partners.”
In practice, this could mean tens of thousands of Volkswagen employees entering short-time work schemes, with consequences likely to ripple across the entire continent.
Industry on alert
BMW, Mercedes-Benz and Daimler have reported that they are currently maintaining full production but stressed that the situation “is being monitored hourly.”
According to the German Association of the Automotive Industry (VDA), prolonged export restrictions from China could once again trigger a domino effect throughout the sector.
For Europe, it is a painful reminder that despite repeated declarations of “technological sovereignty”, the continent remains dependent on Asian supply chains over which it has no real political or production control.
Volkswagen at a crossroads
Volkswagen, Europe’s largest carmaker, has already faced major challenges. Falling demand in the Chinese and US markets and delays in launching electric models have weighed heavily on its financial performance.
The company needs around €11 billion to deliver its investment plan for next year. Part of this sum was expected to come from higher car sales, a plan now derailed by the semiconductor shortage.
As one company executive admitted,
“We don’t know when Nexperia will resume deliveries.”
Globalisation in crisis
The shortage of Nexperia components is not just Volkswagen’s problem. For the entire automotive sector, it is yet another warning sign of the fragility of global supply chains. A modern car contains up to 1,400 electronic components, most of which are sourced from Asia.
During the previous chip crisis of 2021–2022, Volkswagen had to temporarily stop taking orders for the Golf and ID.3 despite record demand.
By 2025, the global automotive chip market is expected to be worth over $67 billion, with 70% controlled by Asian suppliers.
If the current conflict over Nexperia is not resolved quickly, Europe could once again face a wave of shutdowns, financial losses and production delays that would undermine the foundations of its automotive industry for years to come.
Volkswagen now faces not only a production standstill, but also a redefinition of its role in the global industrial order.
