Business
A ‘war room’ mentality: How auto giants are battling the Nexperia chip crunch
A Honda sedan moves down the assembly line on Jan. 28, 2025 at the automaker’s assembly plant in Marysville, Ohio.
Michael Wayland / CNBC
Global automakers are once again bracing for production disruptions due to a potential shortage of automotive semiconductor chips, this time sparked by the Dutch government amid geopolitical tensions between the U.S. and China.
Honda Motor became the first known automaker this week to reduce production due to the problem that involves chips from Netherlands supplier Nexperia, which is owned by Chinese company Wingtech Technology Co.
The industry was hopeful that a meeting this week between President Donald Trump and Chinese leader Xi Jinping in Asia would provide some relief, but no resolution on the chips issue has been announced.
Volkswagen on Thursday reportedly said it has until at least next week before its supplies impact production, while other major automakers have said they are monitoring the situation around the clock, attempting to mitigate disruptions.
“The chip situation from Nexperia, we have a cross-functional ‘war room’ in the building where I’m sitting that has this as [a] primary job,” Stellantis CEO Antonio Filosa told investors during a quarterly call Thursday. “And every day we are pushing actions and projects to extend our period. There is a day-by-day management of what is an industrywide global issue.”
U.S. President Donald Trump and Chinese President Xi Jinping shake hands as they depart following a bilateral meeting at Gimhae Air Base on October 30, 2025 in Busan, South Korea.
Andrew Harnik | Getty Images
Such “war rooms” have become a regular practice in the automotive industry amid supply chain disruptions, which have become more common since the Covid pandemic rattled production and deliveries of many parts, including chips, starting in 2020.
Several automotive industry insiders confirmed to CNBC that war rooms have been established in their companies, as they look into alternative purchasing methods. They included working with major suppliers in an attempt to find alternative sources as well as buying on the open market.
“Suppliers across the motor vehicle industry are working to understand the potential effects on production and supply continuity,” MEMA, the largest vehicle supplier association in the U.S., said in an emailed statement. “Chips and diodes are foundational to automotive components and systems, from infotainment systems to door handles, to steering and braking. Even the absence of a single diode or chip can disrupt the manufacture of vehicles.”
Nexperia
The situation involving Nexperia began late last month, when the Dutch government took control of the company, in what was seen as a highly unusual move, reportedly after the U.S. raised security concerns.
In making the decision, the Dutch government cited fears that tech from the company — which specializes in the high-volume production of chips used in automotive, consumer electronics and other industries — “would become unavailable in an emergency.”
China responded by blocking exports of the firm’s finished products, sparking alarm in Europe’s auto industry.
German automakers are especially sensitive to Nexperia-related disruptions because they rely heavily on large, domestic suppliers, known as “Tier 1s,” and local production facilities and companies, such as Nexperia, despite much of its manufacturing moving to China.
The European Automobile Manufacturers’ Association said this week that carmakers were close to closing production lines because of the chip shortage, which comes four years after a shortage of such parts amid the coronavirus pandemic.
A close-up view of the Nexperia plant sign in Newport, Wales on April 1, 2022.
Matthew Horwood | Getty Images News | Getty Images
“This means assembly line stoppages might only be days away. We urge all involved to redouble their efforts to find a diplomatic way out of this critical situation,” ACEA Director General Sigrid de Vries said in a statement.
The chips affected are legacy semiconductors used in basic vehicle functions such as windshield wipers and window controls — parts that lack sufficient alternative sources, according to S&P Global Mobility.
A Nexperia spokesman referred to a previous statement from the company, which summarized the ongoing situation and said it is seeking an exemption from the export restrictions and working to mitigate the impacts of the decision.
A Wingtech spokesperson on Thursday condemned the Dutch government’s actions, saying the company “will robustly defend its rights and use every legal avenue to do so.”
“Only by restoring full control and ownership rights to the company’s rightful shareholders and management, and by ceasing political interference in corporate governance, can the Dutch government begin to repair the damage to its reputation, de-escalate international tension, and safeguard its own and European economic security,” the spokesperson said via an emailed statement.
Fluid situation
Honda’s production cuts impacts include all of its main North American plants, including large vehicle assembly and supporting facilities across the U.S., Canada and Mexico.
“We are currently managing an industrywide semiconductor supply chain issue, making strategic adjustments to production as necessary to carefully manage the available supply of parts and meet the needs of our customers,” Honda said Thursday in an emailed statement, calling it a “fluid” situation.
The impacts are expected to continue to spread to other automakers if a resolution is not found.
Ford Motor CEO Jim Farley last week said the chip problem was at the forefront of conversations when he made a trip to Washington, D.C, earlier this month. He called it a “political issue,” saying the company is working with the U.S. and China administrations to resolve it.
“It’s an industrywide issue. A quick breakthrough is really necessary to avoid fourth-quarter production losses for the entire industry,” said Farley, adding that automakers have gotten “really good” at maximizing component purchases such as chips following the crisis in 2021.
General Motors CEO Mary Barra made similar comments last week, calling it an “industry issue” that will hopefully be resolved soon.
“While this has the potential to impact production, we have teams working around the clock with our supply chain partners to minimize possible disruptions. The situation is very fluid and we will provide updates throughout the quarter as appropriate,” she said during the company’s quarterly earnings call.
Other automotive executives from Volvo, Mercedes-Benz and more have also shared similar thoughts with investors and the media.
“This is a politically induced situation … which means that the solution to this, or the resolution to this, resides in the political space, primarily between the United States and China, in this case, with Europe kind of caught in the middle,” Mercedes-Benz CEO Ola Källenius said Wednesday during an earnings call.
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In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity.
The National Pension System (NPS) has been largely used for tax savings. In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Here’s a simple breakdown of what has changed.
Higher lump-sum withdrawals at retirement
One of the most significant changes is the higher cash withdrawal limit. Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity. Earlier, 40% had to be annuitised, a provision that often reduced post-retirement returns.
New withdrawal slabs for smaller NPS corpus
PFRDA has introduced a new withdrawal framework based on corpus size, offering greater flexibility to investors with lower balances.
Subscribers with a corpus below Rs 8 lakh can withdraw 100% of the amount as a lump sum. Those with a corpus between Rs 8 lakh and Rs 12 lakh can choose between phased withdrawals using Systematic Unit Redemption (SUR), partial lump-sum withdrawal combined with annuity purchase, or higher lump-sum withdrawal depending on subscriber category.
Systematic Unit Redemption (SUR) introduced
A key structural reform is the introduction of Systematic Unit Redemption, which allows subscribers to withdraw their NPS corpus gradually over a minimum period of six years. This enables a steady post-retirement income stream without locking funds into an annuity.
Investment age limit extended to 85 years
Subscribers can now remain invested in NPS until 85 years of age, up from the earlier limit of 75. This benefits investors who want to delay withdrawals or continue compounding their retirement corpus beyond the traditional retirement age of 60.
More flexibility in partial withdrawals
Before turning 60, NPS subscribers can now make up to four partial withdrawals, compared with three earlier, with a minimum gap of four years. Withdrawals of up to 25% of own contributions are allowed for specified purposes such as education, marriage, home purchase and medical emergencies.
After 60, subscribers who continue investing can make partial withdrawals with a minimum gap of three years between transactions.
Multiple schemes under one NPS account
Non-government subscribers can now hold multiple schemes under a single PRAN, allowing them to diversify across fund managers and investment strategies without opening separate accounts.
100% equity option for long-term investors
From October 2025, private, corporate and self-employed subscribers can invest up to 100% in equities under the Multiple Scheme Framework, up from the earlier cap of 75%. This option is designed for younger investors with long time horizons who can tolerate higher volatility.
Switching between MSF schemes, however, is restricted for the first 15 years or until age 60.
NPS can now invest in gold, REITs and IPOs
NPS equity schemes are now permitted to invest in gold and silver ETFs, REITs, equity AIFs and IPOs. The combined exposure to these assets is capped at 5% of the equity allocation, offering diversification without excessive risk.
Scheme A discontinued: What subscribers must do
Subscribers invested in Scheme A, which focused on alternative assets such as infrastructure, must switch to Scheme C or Scheme E by December 25, 2025. The scheme is being phased out due to low participation and liquidity challenges.
Other investor-friendly changes
Several additional reforms have further improved NPS attractiveness. These include removal of the five-year lock-in for non-government subscribers, permission to pledge NPS corpus to obtain loans (up to 25% of own contributions), and enhanced tax benefits for NPS Vatsalya contributions under Section 80CCD(1B).
Clearer exit and family protection rules
Exit rules have also been streamlined. Subscribers who renounce Indian citizenship can withdraw their entire corpus. In the event of death, nominees or legal heirs receive 100% of the corpus if no annuity has been purchased. Interim relief provisions have also been introduced for cases where a subscriber is legally declared missing.
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December 19, 2025, 16:15 IST
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Business
India’s Net Direct Tax Collection Rises 8% To Rs 17.04 Lakh Crore On Higher Corporate Tax Mop-Up
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Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stands at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
India’s net direct tax collection has increased 8 per cent to over Rs 17.04 lakh crore in the ongoing financial year so far, on higher corporate tax mop-up. Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stood at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
Refund issuances fell 13.52 per cent to over Rs 2.97 lakh crore between April 1 and December 17.
The country’s non-corporate tax, including individuals and HUFs, mop-up so far this fiscal year stood around Rs 8.46 lakh crore, up from about Rs 7.96 lakh crore in the same period last year.
Securities Transaction Tax (STT) collection stood at Rs 40,194.77 crore so far this fiscal year, marginally higher than Rs 40,114.02 crore in the year-ago period.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
In the current fiscal year, the government has projected its direct tax collection at Rs 25.20 lakh crore, up 12.7 per cent year-on-year. The government aims to collect Rs 78,000 crore from STT in FY26.
Rohinton Sidhwa, partner at Deloitte India, said, “Tax refunds issuance has dropped much below last year, while overall tax collection has grown marginally at 4%. The drop in refunds is being attributed to a higher amount of screening of any fraudulent refund claims. Holding back refunds also accelerates litigation that the tax department can ill afford. Overall, the corporate advance tax increase signals good corporate earnings. Non- corporate advance tax collections have, however, declined possibly on the back of rate cuts for individuals given in the previous Budget.”
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December 19, 2025, 12:49 IST
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Borrowing fell last month to its lowest November level for four years but was still higher than expected as figures for the year so far were pushed higher due to the Government’s U-turn on winter fuel payments.
Official figures showed borrowing stood at £11.7 billion last month, £1.9 billion less than in November last year and the lowest for that month since 2021 thanks to a sharp fall in debt interest payments.
But the figure was more than the £10.3 billion expected by most economists and the £8.6 billion forecast in March by the UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR).
The OBR’s monthly forecasts from the budget on November 26 are not available until mid-January, according to the ONS.
Borrowing for the eight months of the financial year so far was £132.3 billion, £10 billion higher than the same period a year ago and £16.8 billion higher than the OBR forecast in March.
This was partly due to an extra £1.8 billion of spending on winter fuel payments after the Government U-turned on its previous decision to severely restrict payments through means testing, instead opting to give the payout to all pensioners except those earning above £35,000 a year.
This helped drive an upward revision to borrowing for the seven months to October by £3.9 billion.
ONS senior statistician Tom Davies said: “Despite an increase in spending, this month’s borrowing was the lowest November for four years.
“The main reason for the drop from last year was increased receipts from taxes and National Insurance contributions.”
November’s figure was pushed lower thanks to falling debt interest payments on borrowing, down by £200 million year-on-year to £3.4 billion and the lowest November level for six years.
Public sector net debt, including the Bank of England, reached £2.93 trillion at the end of November, which is around 95.6% of gross domestic product (GDP) and 0.3 percentage points more than a year ago, although remains at levels last seen in the early 1960s.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said there was “very little Christmas cheer for the Chancellor” in the latest borrowing figures.
He added: “Ms Reeves has staked much fiscal credibility on chunky tax increases in the back end of the forecast period. But we think today’s figures further illustrate the shaky foundations of that gamble.
“Revenues continue to underperform, and the smorgasbord approach of tax increases relies on distortionary tax increases with uncertain yields.
“We also have serious doubts about the Government’s ability to follow through on the raft of spending cuts announced in the Budget.”
Chief Secretary to the Treasury James Murray said the debt interest payments underscored the need to bring borrowing down.
He said: “£1 in every £10 we spend goes on debt interest – money that could otherwise be invested in public services.
“That is why last month the Chancellor set out a Budget that delivers on our pledge to cut debt and borrowing.”
Martin Beck at WPI Strategy said “confidence remains the missing ingredient”.
“A clear and credible pro-growth strategy from the Government – and an end to the pervasive gloom surrounding the UK economy – may matter just as much for the public finances as the fine print of future tax and spending plans,” he said.
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NPS Gets A Major Overhaul In 2025: What The New Rules Mean For Your Retirement Money?
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