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Volkswagen Warns of Possible Production Stoppages Amid Chip Shortage
23 Oct, 2025
Summary
- Volkswagen flags potential production disruptions due to chip supply issues
- Samvardhana Motherson's top client, contributing 9% of revenue in 2025
- BMW also issues profit warning, lowering earnings and cash flow projections
On October 23, 2025, Volkswagen AG has flagged the possibility of production stoppages due to emerging supply chain issues, as a dispute over Chinese-owned chipmaker Nexperia threatens Europe's auto industry. Volkswagen, which contributed 9% to Samvardhana Motherson International's revenue in the 2025 financial year, is the company's largest client.
Samvardhana Motherson has also implemented a mandate to ensure no single client contributes over 10% to its total revenue, as part of its latest five-year plan shared in September 2025. However, another major client, BMW, which accounted for around 5% of the company's revenue, has also issued a profit warning.
Volkswagen, in an internal communication to its staff, has cautioned that disruptions could occur "in the short term" due to chip shortages, though the company has not yet seen any impact on production. The warning comes after the Dutch government seized control of Nexperia last month, citing national security and intellectual property risks. Beijing has since restricted exports of semiconductors manufactured at Nexperia's Chinese plants, effectively squeezing supply to automakers in Europe.
The auto industry's woes are expected to continue, as Samvardhana Motherson and its clients navigate the ongoing supply chain challenges and the fallout from the Nexperia dispute.
