Japan issues new-car wait time warning

The peak body of Japan’s automotive industry has issued a warning of semiconductor shortages due to a trade-war fallout between the governments of the Netherlands and China.

The Japan Automobile Manufacturer’s Association (JAMA) said manufacturers, including Toyota, Honda, Nissan, Mitsubishi and Subaru, may be impacted by potential chip shortages stemming from the Chinese government banning the export of finished semiconductor products from the Dutch company Nexperia, according to a new report from Automotive News.

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This behaviour would have the company fall afoul of new US trade rules, and as a result, the Dutch government took control of the company. In response, the Chinese government banned the export of its completed products, which are manufactured in China.

Nexperia chips are needed by many of the world’s automakers, and originally it was announced by the Alliance for Automotive Innovation that GM, Ford, Volkswagen and Hyundai were likely to be impacted by shortages.

JAMA said it is likely this threat has well and truly expanded to Japan, while Automotive News reports most manufacturers are yet to confirm to what extent they are impacted, with only Honda confirming its suppliers used Nexperia hardware, and it was yet to be affected.

There will likely be a lag time associated with the chip shortages, as there was in the years after the COVID pandemic, with the full fallout from the Nexperia crisis yet to be revealed.

In Europe, Volkswagen warned it couldn’t rule out production shortages related to supply chain issues involving the semiconductor products.

The COVID-era semiconductor shortages, which stemmed from factory shut-downs during the pandemic, saw long delays for new cars over a time period which extended from 2021 to early 2024.

The semiconductors are required for everything from multimedia systems to on-board electronics and even safety equipment. During this period, many manufacturers stripped cars of previously-standard specification in order to deliver them to customers.

Other brands simply told customers to wait, with one of the most popular models during this period, the Toyota RAV4, attracting up to 18 months wait. It also encouraged bad behaviour from dealers, offering customers over-odds to buy cars back off of them as soon as delivery was completed in order to add them to their forecourts at an even more inflated price for those who wanted to skip the queue.

While the extent of this Nexperia threat is yet to be determined, it is not the only trade-war related issue facing the delivery of new cars.

A brewing competition between the US and China over the world’s dependence on rare earth metals also threatens to bring a return to wait times or higher prices.

The rare earth metals, which China controls the supply of up to 90 per cent of depending on the material, have been placed on an export control list by Beijing as the US looks to wean itself off dependence on China for the materials by banning the export of chipmaking equipment to the country.

In October, the German Association of the Automotive industry warned it would cause major supply chain issues, particularly affecting batteries and semiconductors.

China previously restricted supplies of the materials in the middle of 2025, although many suppliers were able to see through the shortage thanks to stockpiles on hand. With these stockpiles now depleted, it could lead to yet more delays facing manufacturers.

The rare earth metals bottleneck created by Chinese industry dominance and its willingness to tighten supply has also put Australia in global headlines, thanks to Prime Minister Anthony Albanese’s meeting with Donald Trump recently.

The two signed a deal on ‘critical minerals’ (which includes rare earths such as Neodymium) expressly designed to open up Australia’s abundant supply of these materials to the US market. Many warn it could take decades to build up the refining capabilities, and the sheer amount of supply from China keeps prices so low it is tough to make the industry profitable.

Many manufacturers and suppliers are looking at weaning themselves off of these critical and rare materials in the future, with the rise of LFP batteries negating the need for supply constrained battery materials such as cobalt, which are required for the higher-performing NCM chemistry.

Suppliers, including ZF, have been working on low-rare earth drive units in order to limit themselves to exposure to critical materials, begging the question of whether such an industry is viable by the time it has been established.

Wait times could return due to these trade forces, but it’s not all bad news for Australia, with our market benefitting from new tariff structures designed to keep Chinese-built cars out of Europe and the US. 

As a result, our market and other right-hand drive locations have become an appealing destination to soak up extra factory capacity, driving prices down, particularly for vehicles manufactured in China.