Suzuki Motors halts Swift production in Japan amid rare earth parts crunch tied to China curbs: Report

Suzuki Motor Corporation has paused production of most variants of its Swift compact car at domestic facilities, with the exception of the Swift Sport, amid a critical shortage of components. The disruption, which began on May 26 and is scheduled to continue until June 6, is reportedly linked to China’s tightened grip on rare earth mineral exports, according to Reuters.

According to a recent statement by Suzuki, the company has postponed its plans to resume production several times. Suzuki now anticipates a gradual restart of production on June 13, followed by a full resumption after June 16. This decision was made as the company has stated that the "visibility of parts supply is improved."

While the company hasn’t formally confirmed the reason, industry sources attribute the delay to slow export licence clearances from China. This has disrupted the supply of essential parts, highlighting growing vulnerabilities in the global automotive supply chain.

China's April announcement to halt exports of various rare earths and magnets has disrupted supply chains critical to the operations of automotive, aerospace, semiconductor, and defence industries.

China, which dominates global rare earth production—accounting for about 70% of output and 90% of magnet manufacturing—imposed fresh restrictions in April. Since then, the approval process for exports has slowed considerably. These measures are viewed as retaliatory, following a round of tariffs imposed by U.S. President Donald Trump on Chinese imports.

Rare earth minerals are essential in modern automobiles, specifically in electric vehicles (EVs), where they are utilised to create compact, high-performance permanent magnets for electric motors. These magnets, crafted with elements such as neodymium, dysprosium, and terbium, facilitate the development of motors that are smaller, lighter, and more efficient than other options, playing a critical role in enhancing EV range and performance.

Furthermore, rare earths are present in internal combustion engine (ICE) components like catalytic converters and are integrated into various systems in both EVs and conventional vehicles, ranging from sensors to display screens.

The impact is now rippling across the global auto industry. Ford was forced to temporarily shut down its Chicago plant producing the Explorer SUV in late May. In Europe, several component manufacturers are scaling down operations, the European Association of Automotive Suppliers (CLEPA) has said.

German automakers are also on high alert. Mercedes-Benz is considering stockpiling key parts to cushion future disruptions, while BMW confirmed some impact on its supply chains and is actively coordinating with suppliers to manage the fallout. While brands like BMW and Mercedes do not source rare earths directly, their Tier-1 suppliers rely on them for electric and hybrid vehicle systems.

In India, alarm bells have rung across the automotive sector. With rare earth magnet supplies dwindling, key industry associations including SIAM and ACMA are preparing to dispatch a delegation to China next week, multiple news reports stated. Their goal: fast-track export licences to avert a production crisis across India’s electric and internal combustion vehicle manufacturing units.

Simultaneously, India’s commerce and external affairs ministries are working with the embassy in Beijing to resolve the escalating supply bottleneck.