Volkswagen Navigates Chip Supply Challenges Amidst Geopolitical Tensions

Volkswagen's production at its main plant is set to proceed without interruption in the upcoming work week, even as geopolitical tensions rise over chipmaker Nexperia, according to a well-informed source. However, the upcoming German public holiday will shorten the work week, and uncertainty looms beyond this period.

The automaker has expressed no immediate intention to initiate a state-backed reduced working hours scheme at its Wolfsburg plant. Nonetheless, Volkswagen is preemptively engaging in discussions with Germany's labor agency about potentially using this option in the future.

Europe's automotive industry is on high alert due to potential disruptions, following China's export restrictions on Nexperia products. This situation stems from the Dutch government's seizure of control over the company due to concerns about its Chinese owner, Wingtech. Volkswagen, along with other manufacturers like BMW and Mercedes, is investigating alternative chip sources to mitigate potential production halts.