Volvo Cars and Volkswagen have warned that a dispute over chipmaker Nexperia could trigger temporary factory shutdowns in Europe, citing supply chain risks. The conflict between China and the Netherlands over control of the company has raised alarm across the automotive sector, reports London's Financial Times.

Nexperia has informed Japanese auto parts suppliers that it may not be able to guarantee deliveries, prompting calls from car executives for diplomatic intervention to avoid broader disruption.

The Japan Automobile Manufacturers Association said the situation could seriously affect global output and urged involved governments to reach a swift and practical resolution.

Volvo Cars chief executive Hakan Samuelsson said the company, owned by China's Geely, was not facing immediate issues and was applying lessons from pandemic-era chip shortages to manage supplier communications.