More Bad News For Volkswagen

Volkswagen is preparing to idle production of the Golf at its Wolfsburg, Germany, plant beginning October 29, as the auto industry faces yet another chip shortage—this time triggered by escalating trade tensions between the United States, the Netherlands, and China.

The automaker warned employees this week that disruptions to microchip supply could force temporary stoppages across several key production lines. The Wolfsburg facility, which serves as Volkswagen’s global headquarters and primary production site for the Golf, is expected to halt assembly of at least three other models—the Tiguan, Touran, and Tayron. There are no specifics about how long the pause in production could last.

As we reported late last week, the problem stems from a sudden supply freeze at Dutch chipmaker Nexperia.

In late September, the Dutch government moved to take control of the China-owned firm following pressure from the United States government. That followed the Department of Commerce’s Bureau of Industry and Security (BIS) issuing new rules designed to close a significant loophole in restricted party lists—any entity that is at least 50 percent owned by one or more entities on the banned list will itself be subject to the same restrictions.

Nexperia is headquartered in Nijmegen, the Netherlands, with front-end facilities in Hamburg and Greater Manchester, but its parent company, Wingtech, is a Chinese firm that became subject to U.S. export-control rules in December 2024.

Nexperia’s CEO, Zhang Xuezheng, was suspended following the Dutch intervention, and a court order was issued to appoint a non-Chinese executive. American officials reportedly told the Dutch government that Zhang needed to be replaced if the company was to be removed from the U.S. list of restricted companies.

Beijing retaliated by banning exports of Nexperia-made chips, effectively cutting off deliveries to automakers across Europe.

Volkswagen does not have an immediate replacement supplier available, and switching to alternative chips would require lengthy internal testing and certification. Industry sources told Autocar that even if VW secured another vendor today, the validation process could take months before new components reach production lines.

The Wolfsburg pause could be the first canary down concerning Volkswagen’s broader manufacturing network—plants in Emden, Hanover, and Zwickau could also be at risk of temporary shutdowns as supplies run out. VW has reportedly begun discussions with German labor officials about activating Kurzarbeit, a government-subsidized short-time work program that allows companies to reduce employee hours while avoiding mass layoffs.

[Images: Volkswagen]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.