- New chip crisis set to hit car production?
- Banks gear up for fight with FCA
- Vauxhall MD Steve Catlin urges government to listen on ECOS
- Hilary Benn warned of Northern Ireland auto industry Brexit ‘collapse’
- WEEK AHEAD: Aston Martin Q3
- PAYE tax contributions hit 20-year high
- New record for cash ISA savings
- Tavares: Stellantis could be broken up
- Chinese car sales set to flatline
- OPINION: Geely new entrant is one to watch
New chip crisis set to hit car production?
Nexperia is a company few had heard of until recently. However, the Netherlands-based semiconductor firm, owned by China’s Wingtech, has found itself at the centre of a diplomatic row that could impact car production around the world.
The bust-up follows a decision by the Netherlands government to remove Nexperia’s Chinese leadership team and take direct control of the company over concerns about national security. The Telegraph reports that, in response, Chinese staff at Nexperia were told to ignore instructions from the Dutch office.
Crucially, China has also curbed shipments of chips to Europe.
Nexperia makes chips in Europe but them ships them to China to be finished and packaged. It accounts for two-fifths of transistors and diodes used in the auto industry – but their ubiquity extends even further, say industry experts: they could be “almost any of the electronics in the car”.
Nexperia warned customers on 10 October that it was no longer able to guarantee delivery of their chips. OEMs and suppliers such as VW and ZF have set up task forces to secure replacement supplies – helped by the fact Nexperia chips are relatively low-tech ‘commodity chips’ controlling things such as windscreen wipers, rather than high-end units.
Volkswagen has already announced it has secured an alternative supplier that “could compensate for the loss of supply of Nexperia semiconductors”. It will avoid stoppages this week as a result.
However, US plants say they are two to four weeks away from “significant impacts” on vehicle production, according to MEMA, the largest vehicle supplier association in the states.
“A handful of these chips can literally stop production of a full assembly plant,” MEMA senior vice president Steve Horaney told Automotive News. “There are substitutes, but probably not for everybody.”
Ford CEO Jim Farley has called the conflict a “political” issue and an “industrywide issue… a quick breakthrough is really necessary to avoid fourth-quarter production losses for the entire industry”.
Banks gear up for fight with FCA
Major banks including Barclays and Lloyds have stepped up the amount of cash they’ve set aside to compensate customers over ‘mis-sold’ car loans – but are also gearing up for a fight with the FCA whose approach is “towards the extreme end” of previously expected outcomes.
The £11bn compensation scheme will give payouts averaging £700 to an estimated 14.2m car owners. Deals up to 18 years ago can be considered, even if the customer no longer owns the car.
Banks want the FCA to extend the quickfire six-week consultation on the compensation scheme, but the regulator has rejected such demands.
“We are moving at pace,” said the FCA, “having engaged for months on a possible scheme and timetable. Now the courts are clear that liabilities exist, consumer should be compensated quickly, so lenders can draw a line under this.
“Complaints cannot be paused indefinitely.”
A senior source at one lender told The Times that “everybody’s horrified that they’re unwilling to listen to reasonable arguments”.
Another said: “Surely the FCA’s lawyers are telling them that if they fail to give the lenders a proper opportunity to take part in the compensation, it will strengthen their case [in any legal battle]”.
Lenders are said to be “racing to appoint KCs to advise on their options”.
Vauxhall MD Steve Catlin urges government to listen on ECOS
Vauxhall MD Steve Catlin says it is important the government is open to feedback from the industry following the recent consultation on changes to Employee Car Ownership Schemes.
“We would urge the government to listen very closely to the lobbying and the discussions that are happening at the moment,” he told Auto Sunday, “not just from manufacturers but from retailers that operate the scheme as well.
“We think that if they are able to have an open mind and listen to that feedback, they might change their mind and understand that it could be significantly negative.
“We’d ask them to think again.”
- Read the full interview in next month’s Auto Market Insight: subscribe here
Hilary Benn warned of Northern Ireland auto industry Brexit ‘collapse’
Northern Ireland secretary Hilary Benn has been warned of a “potential collapse” of the country’s automotive industry due to post-Brexit arrangements. New EU rules around emissions and the sale of cars will have a “significant impact” on the sector, said DUP MP Gavin Robinson.
Under the Windsor Framework, the region continues to follow many EU trade and customs rules to avoid a hardening of the Irish land border.
In a meeting of the Northern Ireland Affairs Committee, Benn said a remedy is coming and he is conscious of a need for clarity before 1 February 2026.
WEEK AHEAD
Tuesday, BRC shop price index
Wednesday, Aston Martin Q3
DATA INSIGHT
PAYE tax contributions hit 20-year high
£235.4bn: PAYE income tax contributions from UK workers in 2023/24. It’s an 11.4% rise compared to 2022/23, says the Global Payroll Association, and the highest rate of PAYE contributions since 2004.
New record for cash ISA savings
£24.5bn: Amount saved into cash ISAs in the first five months of this tax year, a new record. There is speculation the chancellor may cut the cash ISA allowance in the November budget, to encourage more people to invest in stocks and shares ISAs.
GLOBAL AUTO
Tavares: Stellantis could be broken up
Former Stellantis CEO Carlos Tavares says the company faces a potential breakup. In a new book, he says the French, Italian and US operations may have to split if the firm fails to withstand pressures from various stakeholders in its home bases.
“I am worried that the three-way balance between Italy, France and the US will break,” he said.
Chinese car sales set to flatline
Passenger car demand in China is poised to stagnate in September after seven months of growth. It follows the ending of government trade-in subsidies worth around £1,600 for new electrified vehicles. 1.78 million vehicles were retailed in the first 27 days of September, unchanged from 2024.
OPINION
Geely new entrant is one to watch
Geely is the latest Chinese new entrant to arrive in the UK, hosting a splashy brand launch in London this week. I’ve been to a fair few of these now, and the Geely event was the most impressive yet; smooth, slick and highly professional.
The company has been rehearsing its UK launch for some time now. After all, Geely owns LEVC and Lotus, along with Volvo and Polestar, so can tap into plenty of UK-specific expertise. It also makes cars here, in Coventry and Norfolk, and develops them at several locations too.
Could this lead to production in the UK? It has plenty of capacity at that Coventry LEVC facility. Bosses didn’t shut this down; it remains a possibility. But first it need to get sales rolling, with a 25-strong retail network in place for its launch, 50 by the end of the year and 100 by the end of 2026.
It needs such a comprehensive network because Geely has ambitious plans to sell 100,000 cars a year here in the UK – this would see it surge ahead of Ford and vie with Kia in the overall registrations rankings. A line-up of 10 models, both EVs and hybrids, will help here; the Geely EX5 is merely an amuse-bouche.
It’s not backwards in coming forwards when it comes to prices. The Geely EX5 starts from just £31,990, but that’s just the start of it. Each version has a ‘Geely EV Grant’ from £2,300 to £3,750, which takes the price of the top-spec Max model down to £32,240 – just £250 more than the pre-grant base model. Which, with the grant included, costs £29,690. Or, less than a base Ford Puma Gen-E. For a large, almost Skoda Enyaq-sized EV.
Geely also offers a subsidised wall box charger from premium outfit Andersen, plus an additional £1,000 scrappage inventive for those trading in an old petrol or diesel car. There’s a 3.9% APR four-year PCP deal with monthly payments from £339 a month (the deposit is only 10%), and Geely even includes an eight-year, 125,000-mile warranty.
On the night, I spoke to Geely UK deputy dealer development director Adam Harkin, formerly of BYD. You can read the wide-ranging interview in next month’s Auto Market Insight. Another ex-BYD exec, Mark Blundell, is Geely’s chief marketing officer. The talent-focused recruitment drive has even seen Geely snare ace PR chief Simon Branney; in all, it is planning to have a 300-strong team in the UK.
Its execs are fully aware of what BYD, Omoda and Jaecoo have already achieved. “We probably benefit from the timing because the UK consumer is now very aware of how good Chinese vehicles are,” said Harkin. So the likes of BYD have prepared the ground for you? “Potentially…” he says.
I’ll be driving the Geely EX5 very soon. But everything I’ve seen so far has impressed – and the 16 retail partners Geely already has on board sense the opportunity, too. Its targets are so ambitious, it’s a brand we have to take note of. Here’s to now following its progress and seeing if and when it truly becomes a challenger to the packed collective of brands on a UK market share of 5%.
Richard Aucock
Editor
Auto Sunday
Get in touch: tristan@autosunday.co.uk
ISSN 2977-6597