Honda Halts Mexico Production After Losing Nexperia Chip Supply

Honda halted vehicle production in Mexico after losing access to semiconductor supplies from Nexperia, a Dutch-based chipmaker. On Oct. 28 the company announced it had suspended operations at local plants and is taking steps to limit the impact. “We are doing everything possible to minimize the effects of this supply interruption,” Honda said.

The disruption follows a move by the Netherlands to take control of Nexperia over national security concerns related to its China-based parent, Wingtech. In response, Beijing suspended exports of Nexperia products, including microchips used in automotive systems. The restriction has affected North American supply chains,  disrupting delivery of microcontroller and power chips required for engine and safety modules.

Honda did not provide a timetable for restarting production or disclose affected volumes. Its plants in Celaya, Guanajuato, and El Salto, Jalisco, supply vehicles to Mexico, the United States, and Canada, where output is also being adjusted. The company is working with suppliers to secure alternative components, but technical validation may delay replacements. “Supply chain conditions are under assessment,” Honda said.

Volkswagen also reported impact from Nexperia’s shortage but has avoided shutdowns by sourcing chips from another provider. Analysts say the disruption underscores North America’s continued reliance on semiconductors despite buffer stock strategies implemented after the 2021 global chip shortage.

Nissan said it has semiconductor inventory “until the first week of November” but lacks “a complete view” of lower-tier suppliers. Mercedes-Benz CEO Ola Källenius described the issue as politically driven and said the company is “looking for alternatives around the world.”

A Brazilian government official warned some automakers may halt operations within weeks. Consultant Klaus Schmitz of Arthur D. Little noted that manufacturers are testing component substitutions and added, “Negotiations with China are likely.”