Samvardhana Motherson shares rise despite biggest client flagging production concerns

Shares of Samvardhana Motherson Ltd. gained nearly 2% on Thursday, October 23, despite Volkswagen AG flagging possible production stoppages due to the emerging supply chain issues, as the dispute over Chinese-owned chipmaker Nexperia threatens Europe's auto industry.

Volkswagen AG contributed 9% to Samvardhana Motherson's revenue in financial year 2025, according to the company's annual report, which is the highest among its list of clients.

Samvardhana Motherson has also come out with a mandate that ensures no single client contributes over 10% to the company's total revenue, as part of its latest five-year plan that it shared in September.

Recently, another major client, BMW, which accounted for around 5% of the company's revenue, issued a profit warning as well.

Volkswagen AG warns of production disruption

On Wednesday, October 22, Volkswagen, in an internal communication to its staff — first reported by Bild and later confirmed by the auto company to news agency Reuters — said production had not yet been affected by chip shortages but cautioned that disruptions could occur "in the short term".

The company spokesperson said it cannot rule out an impact on production.

The warning comes in the back of the Dutch government seizing control of Nexperia last month, citing national security and intellectual property risks. Beijing, in response, restricted exports of semiconductors manufactured the Nexperia's Chinese plants, effectively squeezing supply to automakers in Europe.

The Bild reported that Volkswagen was preparing to halt its Golf series production next week, which would be followed by other models. However, Volkswagen declined to comment on the same, saying the reports were "speculative". The carmaker will temporarily be pausing output of its Golf and Tiguan models at its Wolfsburg plant on Friday for unrelated inventory purposes.

Shares of Volkswagen ended over 2% lower in regular trading in Europe on Wednesday.

BMW issues profit warning

Earlier this month, BMW reduced its volume expectations for the Chinese market in the December quarter and estimated its automotive earnings before interest and tax (EBIT) margin for 2025 to be 5-6%, down from the previous 5-7% target.

It also lowered its projection for automotive free cash flow from over €5 billion to over €2.5 billion.

The change in guidance comes after weak sales in China, higher tariff costs and payments to support dealers under pressure from lower commissions on local financial products. BMW also postponed its expected reimbursements of customs duties from the US and German authorities, which totals to a three-digit million figure, from 2025 to 2026.

Samvardhana Motherson Share Price

Shares of Samvardhana Motherson were trading 1.87% up at ₹107.34 apiece around 9.30 am on Thursday. The stock is up only 3.6% so far in 2025, having declined nearly 4/2% in the last one month.

Also Read: Five reasons why Nomura expects this Tata Group stock to surge 25%