"Germany lobby group says China's rare earth curbs could halt auto output"

From Reuters, June 3:

• China has not issued enough licences to ensure production, lobby group says
• Mercedes-Benz says does not have experience of disruption yet
• Comments are strongest warning yet from the lobby group

China's export restrictions on rare earths that are widely used by the auto industry could disrupt, or even halt, German car production, Germany's VDA auto industry lobbying group said on Tuesday.

 

The comments mark the first time the lobby group has said output was at risk of being halted as a result of China's decision to limit exports of rare earth magnets. It did not specify a timeframe.

 

The auto industry, which needs the magnets for anything from windshield wiper motors to brake sensors, may struggle to keep production running smoothly, the head of VDA, Hildegard Mueller, said in a statement to Reuters.

 

Mueller said China has issued some permits to a handful of rare earth producers, including suppliers to Volkswagen - but not enough to ensure the adequate supply of components needed to allow smooth production.

 

"If the situation is not changed quickly, production delays and even production outages can no longer be ruled out," she said.

 

Robert Bosch, the world's largest car supplier by revenue, said in May the new procedures had hampered suppliers, but on Tuesday declined to give further details.

In written comments, Mercedes-Benz said it was "evaluating and monitoring the situation very closely"....

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