Auto Parts Manufacturers

The 3,616 auto parts manufacturers in the US produce components, modules, and systems for auto manufacturers (also known as original equipment manufacturers or OEMs), other parts suppliers, and the aftermarket. About 70% of automotive parts are for OEMs, while 30% are destined for the repair/modification market (aftermarket).

Dependence on Auto Industry

The auto manufacturing industry is global and dominated by a few large companies.

Vulnerability to Commodity Prices

Auto parts manufacturers are vulnerable to variability in costs of raw materials, particularly steel, oil, copper, resins, and rubber.

Oct 26, 2026 - Hybrid Vehicle Boom Opens New Opportunities for Parts Manufacturers

• The growing popularity of hybrid vehicles gives auto parts manufacturers a source of new business as automakers rethink their electric vehicle strategies. Through September 2026, US hybrid sales jumped 22.4% from a year earlier, capturing 15.6% of the new vehicle market, according to the National Automobile Dealers Association. Unlike fully electric vehicles, hybrids retain gasoline engines and traditional mechanical components while adding electric motors, batteries, and sophisticated power electronics. That creates opportunities for manufacturers serving both conventional and electric powertrains. Automakers are responding to the demand shift, with Toyota reportedly targeting a 30% increase in global hybrid production by 2028 compared to its 2026 target. However, the transition also presents challenges for suppliers, which must juggle production and investment across gasoline, hybrid, and fully electric vehicle platforms.
• Chinese-made auto parts could gain a larger foothold in American vehicles as automakers look for ways to cut costs despite growing trade tensions. Volvo CEO Håkan Samuelsson told The Wall Street Journal that the Swedish automaker plans to share more mechanical components with its Chinese parent company, Geely, potentially bringing Chinese-made brakes and air-conditioning equipment into US-built vehicles. Volvo intends to keep Western-developed software separate to comply with US restrictions on Chinese automotive technology. The strategy highlights a growing challenge for American auto parts manufacturers, which face competition from lower-cost Chinese suppliers even as tariffs and trade restrictions encourage domestic production. Samuelsson also believes Chinese automakers could eventually establish US manufacturing operations and use American suppliers, creating new business opportunities. Meanwhile, Volvo plans to expand production at its South Carolina factory as automakers increasingly tailor their vehicles and supply chains to regional markets.
• Auto parts manufacturers face another squeeze on margins as automakers demand lower component prices even as suppliers contend with elevated production costs. Honda has reportedly asked major suppliers to cut costs as part of a broader effort to save about $9.4 billion by 2030. The automaker is looking for savings through greater parts standardization and changes in sourcing, putting additional pressure on manufacturers that may have limited room to absorb price reductions. The demands come as US parts makers are still navigating higher costs for materials and imported goods caused mostly by trade disputes. Suppliers may have to lean more heavily on automation and other productivity improvements to meet automaker price targets. Honda is also considering greater use of lower-cost Chinese suppliers, raising the competitive pressure on US manufacturers seeking to hold onto OEM business.
• The White House's escalating trade fight with Canada is putting the highly integrated North American auto parts supply chain in the crosshairs. Trump said tariffs on Canadian cars, trucks, auto parts, and steel will rise to 50% on January 1, 2027, just days after saying a broader trade deal was close. Canadian officials say last-minute US demands helped derail those negotiations, adding to a pattern of tariffs being threatened, delayed, changed, and revived. For parts manufacturers, that unpredictability may be nearly as damaging as the tariffs themselves. Components routinely cross the border multiple times during production, making long-term pricing, sourcing, and investment decisions difficult when trade rules can shift with little warning. Canada is responding with counter tariffs on US goods beginning September 8. The result is a negotiating environment manufacturers may struggle to treat as stable enough for long-term planning.

Industry size & Structure

The average auto parts manufacturer employs 145 workers and generates $80 million in annual revenue.

• The auto parts manufacturing industry consists of about 3,616 companies that employ 524,700 workers and generate $290.7 billion annually.
• The five major component systems in an average internal combustion engine car include the body exterior (25% of total costs), interior (24%), electronics and electrical (18%), powertrain (18%), and chassis (15%), according to Munro & Associates.
• Large companies include Adient, BorgWarner, and Lear.