Volkswagen warns of production problems due to Nexperia chips, production of Golf and Tiguan to be suspended on Friday

(Patria) - German Volkswagen has warned that its car production could be affected by a shortage of Nexperia semiconductors amid a deepening dispute between China and the Netherlands over chip manufacturers, AFP reported.

Dutch officials invoked a Cold War-era law last month to effectively take control of the Netherlands-based, Chinese-owned Nexperia, citing national security concerns, as the sector increasingly becomes a hotbed of geopolitical tensions.

The company then announced that Beijing had banned it from exporting certain goods from China since the beginning of October, which could pose a serious problem for car manufacturers as its chips are widely used in vehicle electronic control units.

Volkswagen, Europe's largest carmaker, confirmed that some Nexperia components are used in its vehicles, but said production is "currently not affected".

"However, given the dynamic nature of the situation, an impact on production in the short term cannot be ruled out," the company, whose ten brands range from Audi to Seat and Skoda, added, without providing further details.

It was stated that the production of VW Golf and Tiguan will be suspended on Friday as part of planned measures and will resume next week, although it denied earlier media reports that this was related to a chip shortage.

German newspaper Bild reported that the chip shortage would lead to production stoppages in key VW factories from next week. However, a spokesperson for the Zwickau plant told AFP that this was "incorrect".

Hildegard Mueller, president of the German automotive industry association VDA, warned on Tuesday that the consequences "could lead to significant production restrictions in the near future, and perhaps even production stoppages".

"The current focus should be on finding quick and pragmatic solutions," she said.

VW's share price fell by more than two percent in Frankfurt on Wednesday after reports of potential disruptions at its factories emerged.

Stefan Bratzel, an automotive industry expert at the Center for Automotive Management in Germany, told AFP that car manufacturers are "trying to switch to other suppliers".

"But it is not easy to find other suppliers in the short term," he said.