Due to a lack of parts associated with China's export limitations on rare earths, Japanese carmaker Suzuki Motor has halted manufacturing of the majority of its Swift compact car models at its domestic plants.
This is the first time Beijing's restrictions have directly affected a Japanese automaker, and experts caution that more significant disruptions may come.
Starting on May 26 and expected to last until June 6, the halt does not apply to the Swift Sport variant.
Reports indicate that the action is related to components procurement delays brought on by sluggish clearances of Chinese export licenses.
Due to a lack of parts associated with China's export limitations on rare earths, Japanese carmaker Suzuki Motor has halted manufacturing of the majority of its Swift compact car models at its domestic plants. This is the first time Beijing's restrictions have directly affected a Japanese automaker, and experts caution that more significant disruptions may come.
Since enacting new regulations in April, China, which produced approximately 70 percent of the world's rare earth metal in 2023 and 90 percent of its rare earth magnets, has halted the granting of export licenses. US President Donald Trump's reciprocal tariffs on Chinese imports prompted these actions.
The interruption has highlighted how vulnerable the world's auto industry is to China's hegemony in rare earth elements, which are necessary for high-tech applications such as electric and hybrid vehicle engines.
The problem is not exclusive to Japan. According to CLEPA, the European Association of Automotive Suppliers, European parts suppliers are starting to halt operations, and Ford briefly closed its Explorer SUV assembly plant in Chicago in late May.
BMW has admitted that the impact is already being felt in a few of its supply networks. To avoid serious repercussions, the business is keeping a close eye on risks and working with suppliers.
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Authorities in India have been alerted by industry experts to the rapidly diminishing supply of rare earth magnets. They warned that manufacturing at a number of ICE and electric vehicle facilities may stop if imports from China don't quickly resume.