German auto association warns of risk to production from Nexperia dispute

• Reuters

• Published On Oct 22, 2025 at 10:57 AM IST

A stand-off between China and the Netherlands over chipmaker Nexperia could significantly disrupt automotive production in the near future, Germany’s VDA industry association said on Tuesday.

“The situation could lead to considerable production restrictions in the near future, and possibly even to production stoppages if the interruption in the supply of Nexperia chips cannot be rectified in the short term,” VDA President Hildegard Mueller said in a statement.

The VDA is in contact with the affected companies, the German government and the European Commission, it said.”The current focus should be on finding quick and pragmatic solutions,” Mueller said.

The Dutch government seized control of Nexperia, an important supplier of basic chips used in cars, on September 30, citing intellectual property concerns due to its Chinese ownership. In response, the Chinese government banned exports of the company’s finished products.

While not sophisticated, Nexperia’s chips are widely used in high volumes in cars as well as consumer electronics.

The Nexperia dispute only adds to global trade tensions hurting European carmakers and their suppliers, including higher US import tariffs and Chinese export curbs on rare earths.

Volkswagen and BMW are among the German carmakers whose supplier networks are affected. Both have said they are working to assess the impact of the dispute.