Suzuki Motor halted Swift production due to China's rare earth curbs, sources say

TOKYO (Reuters) -Suzuki Motor's suspension of production of its flagship Swift subcompact is due to China's rare earth restrictions, two people familiar with the matter said, becoming the first Japanese automaker to be affected by the export curbs.

The small car maker halted production of the Swift, excluding the Swift Sport version, from May 26 citing a shortage of components.

Plans to resume output have been pushed back several times. Suzuki now expects a partial restart of production on June 13 with full resumption after June 16, as the "prospect of parts supply is clearer" now, it said in a statement.

The company declined to comment on the reason for the suspension. The sources declined to be identified as they were not authorised to speak on the matter.

China's decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors.

Alarm over the situation has grown with global automakers warning of potential production halts.

Some European auto parts plants have suspended output and Mercedes-Benz is considering ways to protect against shortages of rare earths.

Japan is planning to propose strengthening cooperation with the United States on rare earth supply chains in upcoming tariff talks, the Nikkei business daily reported on Thursday.

The Nikkei was the first to report on the reason for the Swift model suspension.

(Reporting by Maki Shiraki in Tokyo and Aditi Shah in New Delhi; Additional reporting by Kantaro Komiya and Satoshi Sugiyama; Editing by Chang-Ran Kim, Christopher Cushing and Edwina Gibbs)