【By Liu Bai, Observers Network】Layoffs, losses, production halts... Volkswagen's days are not going well. According to a report by the New York Times in the United States on October 30, due to factors such as Trump administration tariffs and declining sales in the Chinese market, this European largest automaker recorded a loss of 1.3 billion euros in the third quarter, marking its first loss since the pandemic lockdowns.

Especially, the Dutch government's aggressive actions against Chinese enterprises have pushed Volkswagen and other global automakers into a new chip supply crisis. A European economist has openly stated that China's restrictions on chip exports remind people that German industry is no longer the game master, but can only be forced to play along.

On October 30, Volkswagen Group released its Q3 2025 financial report. Due to the Trump administration's tariff policy and adjustments in the electric vehicle strategy of its Porsche brand, the company recorded a loss of 1.3 billion euros in the third quarter, while it made a profit of 2.8 billion euros in the same period last year. This is the first time Volkswagen has suffered a loss since the pandemic lockdowns. During the pandemic, global supply chain disruptions led to semiconductor shortages.

In general, Volkswagen Automotive expects the total cost related to tariffs this year to reach 5 billion euros. This automotive giant is desperately seeking other cost-cutting measures to deal with the impact of trade wars.

Munich, Germany: Volkswagen car transporters at a marshaling yard, Visual China

The report pointed out that demand for Volkswagen products in the Chinese market has declined. Tariffs in the US market have risen from 2.5% in August to 15%. If these disputes are not resolved, they may cause further losses for Volkswagen and other German automakers.

For decades, Germany has relied on a thriving automotive industry to create jobs and generate fiscal revenue, earning the title of "the engine of Europe." However, data released by the German Statistical Office on the 30th showed that the crisis has gone beyond the automotive manufacturing sector. From July to September this year, Germany's economy grew by zero compared to the previous quarter.

Volkswagen Group, which owns 10 brands including Audi, Volkswagen, and Porsche, is also involved in the dispute triggered by the Amphenol Semiconductor incident. The basic microchips produced by Amphenol are important components used in systems such as windshield wipers, turn signals, and warning lights for Volkswagen and other European automakers.

After the U.S. government issued an export control penetration rule on September 29, the Dutch government immediately revived a Cold War-era relic, the "Commodity Supply Act," which had never been used since 1952, and forcibly took over the core assets of Amphenol Semiconductor located in China's Wintech Technology in the Netherlands.

Media reports indicate that after the Dutch government intervened, the Amphenol Semiconductor factory in Dongguan, China, has restricted shipments since the National Day and Mid-Autumn Festival holiday.

Analysts warned that the crisis triggered by the Amphenol Semiconductor dispute reflects the overall decline in the industry's once-influential status.

"Currently, the German automotive industry faces the risk of production stoppages due to China's export controls on microchips. This phenomenon reminds us again: German industry is no longer the game master, but can only be forced to play along," wrote Carsten Brzeski, an economist at ING, in a report.

Volkswagen's Chief Financial Officer, Arno Antlitz, said on October 30 during a conference call with analysts that the company is urgently allocating resources every week to ensure sufficient supply of about 2,000 small semiconductors. "Our chip inventory can only last until next weekend."

But the situation remains unstable. In a statement, the company said: "Performance forecasts are based on the assumption of adequate semiconductor supply."

"We expect the tariff policies to continue to take effect," Antlitz said helplessly, "we need to intensify our efforts to cut costs and increase capacity across all brands and business departments."

Volkswagen is negotiating with the Trump administration, hoping it will consider the company's investments in the United States, including a $1 billion investment in electric vehicle manufacturer Rivian. The company also said it will decide by the end of the year whether to build a new factory for the Audi brand in the United States.

Besides Volkswagen, Nissan and Mercedes-Benz are also affected by the chip shortage. Nissan said its chip inventory can only last until the first week of November. A Honda Motors spokesperson said the company has already suspended production at one of its factories in Mexico and started adjusting production plans in the United States and Canada.

A Brazilian government official said that if the crisis continues, some automobile manufacturers in Brazil may be forced to shut down within two to three weeks.

Klaus Schmitz, partner at Arthur D. Little, an American consulting firm, pointed out that automakers are considering pausing production or using alternative parts to get through this shortage.

However, he also said that ultimately, both companies and governments will have to sit down and negotiate with China.

"Companies will definitely negotiate with China now, and governments of various countries are also negotiating with China, especially the United States," Schmitz said. "The actual impact is yet to be seen, but this is likely to be a rather serious situation."

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