'BIG ... Mercedes and Nissan sound crisis alarm over China-Europe crisis over chip company Nexperia

Global auto giants Nissan Motor and Mercedes-Benz reportedly became the latest to publicly warn about a worsening semiconductor supply crisis, directly linking the scarcity to a heated trade and intellectual property dispute between the Netherlands and China over key Dutch chipmaker Nexperia. The growing fallout highlights the auto industry's profound vulnerability to escalating geopolitical trade frictions between Beijing and the West.

Nexperia 'China tussle' hits global production

The immediate trigger for the new wave of supply disruption is a stand-off over Nexperia, a company whose chips are ubiquitous in automotive components. The crisis erupted after the Dutch government seized control of the chipmaker in September, citing concerns over the possible transfer of crucial technology to Nexperia’s Chinese parent company, Wingtech. The US has previously flagged Wingtech as a potential national security risk.

In retaliation, China has reportedly banned the export of Nexperia's finished products from its plants in the country, effectively choking off a vital source of chips for the global auto supply chain.

According to a report in Reuters, at the Japan Mobility Show in Tokyo, Nissan's Chief Performance Officer Guillaume Cartier reportedly underscored the severity of the challenge. "It's not a small issue, it's a big issue," Cartier told reporters, admitting the automaker currently lacks "full visibility" on the long-term impact.

Cartier indicated that Nissan’s immediate supply was "okay to the first week of November," but noted that tracking chip availability becomes exponentially harder the further down the supply chain one looks.

Meanwhile, in Germany, Mercedes-Benz CEO Ola Kaellenius confirmed the automaker is aggressively "scouring around the world for alternative supply." Like Nissan, Kaellenius expressed difficulty in predicting how or when the situation would resolve.

Global pains

The supply crunch is already threatening to halt production across major manufacturing centers.

In Brazil, a significant global automaking hub, an official warned on Tuesday that some manufacturers may be forced to suspend operations within the next two to three weeks if the Nexperia-related crisis is not resolved. The Brazilian government is now in contact with Chinese authorities, attempting to find a diplomatic and commercial solution.

This latest geopolitical challenge comes as the auto industry continues to grapple with existing headwinds, including U.S. tariffs and Chinese export restrictions on rare earth minerals.