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Another Chip Shortage Threatens Production of Several Volkswagen Models

by Guillaume Rivard
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Photo: Volkswagen

While production of the Volkswagen ID. Buzz electric minivan is about to be suspended for a week due to low global demand, that's nothing compared to the fate awaiting some of the company's other, more popular models.

As reported by British publication Autocar, Volkswagen will stop making the Golf (including the Golf GTI and Golf R) in Wolfsburg from October 29. Plant workers reportedly received a letter on Wednesday morning warning them of possible production stoppages in the coming days.

The Tiguan compact SUV and two other models not exported to Canada, namely the Touran and Tayron, are likely to suffer from halted production, as well. The automaker has not specified when production might resume.

Production interruptions at the Emden, Hanover and Zwickau factories are also not ruled out. However, other than the ID. Buzz, these three sites do not build vehicles for the North American market.

Photo: Volkswagen

This is all caused by a supply problem for semiconductors—electronic chips essential to the operation of multiple vehicle systems. Unlike the shortage that rocked several industries, including auto, during the COVID-19 pandemic, the issue this time stems from the trade war between the U.S. and China.

Volkswagen’s supplier, Nexperia, is based in the Netherlands but owned by a company (Wingtech Technology) that’s partially controlled by the Chinese government. On September 30, under pressure from the Trump administration, the Dutch government took over, citing intellectual property concerns. China was still able to order Nexperia to stop exporting semiconductors in retaliation.

Volkswagen has reportedly been warned by Nexperia that it can no longer guarantee long-term supply of semiconductors. According to Autocar, the German automaker has no alternative semiconductor suppliers to fill the gap in the short term.

In other words, production stoppages affecting the Golf, Tiguan and others in Germany could very well drag on. Luckily for us, the Canadian-spec Tiguan is assembled in Mexico, but not the Golf GTI and Golf R.

Photo: Volkswagen
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