The powerful auto lobby in Germany predicts that China’s new export restrictions on rare earths will stop production at major car manufacturers because customs clearance delays and licensing problems disrupt the supply of essential materials.
The German VDA auto group stated that slow rare earth export licensing combined with customs delays created difficulties for suppliers to obtain essential components. The German automotive industry faces the possibility of production shutdowns because of delayed action.
The essential components of anti-lock braking systems and windshield wiper motors depend on rare earth elements. The Chinese government’s new export licensing requirements for these materials has created a major diplomatic dispute. Diplomats together with company officials from India Japan and Europe are currently working to meet Chinese counterparts for faster approval processing.
The number of granted licenses including those for Volkswagen suppliers does not provide sufficient stability to production according to VDA President Hildegard Mueller.
The Chinese regulatory changes have caused German parts manufacturer Bosch to experience delays in obtaining rare earth materials during the previous week. The Chinese government implements these restrictions to gain control over trade and technology disputes according to widespread analysis.
