Auto industry under pressure over Nexperia scandal: Nissan cuts production

According to Reuters news agency, Nissan is cutting local production of its best-selling Rogue model, with fewer cars rolling off the production line starting next week.

The company is facing shortages of the necessary chips for its cars. These were supplied by the Nijmegen-based company Nexperia, but supplies have stalled after the Dutch government placed the company, which has a significant branch in China, under administration , sparking a dispute between the Netherlands and China.

Nissan calls the situation "unpredictable" and says it can recover once the chip supply stabilizes. Supply chain risks, such as those at Nexperia, are putting pressure on the company's financial results.

The Nexperia chip dispute has already caused chaos at several companies that need the chips, for example, for heat pumps and central heating boilers. But the automotive industry, in particular, is heavily dependent on Nexperia's chips.

Honda has already cut back production in the US , and on Tuesday, automotive supplier Bosch announced it would implement temporary work-hour reductions at two of its factories in Germany due to the shortages.

Volkswagen faced the threat of a production halt, and the company warned that the chip shortage could impact this year's financial targets. In the past quarter, the company already suffered a loss of €1.1 billion, partly due to higher import tariffs.

Competitor BMW also lowered its annual financial expectations, but added that Nexperia is not a direct supplier to the company. Its suppliers are, and according to BMW, they are exploring solutions and alternatives together.

"Production and the market are currently running well, but it's an unstable situation," the company said Wednesday during its quarterly results presentation. The company is monitoring the situation "several times a day."

BMW is also calling on politicians to find a solution. "I think it's crucial that all stakeholders are aware that these are global supply chains, and that they will remain so," says a spokesperson. "Even if you take measures to reduce interdependence."

Nexperia in the Netherlands makes large plates that are then reduced to small 'Lego bricks' in China, as reporter Bart Reijnen explains in this video.