Auto Parts Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 3,700 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).
Vulnerability to Commodity Prices
Auto parts manufacturers are vulnerable to variability in costs of raw materials, particularly steel, oil, copper, resins, and rubber.
Dependence on Auto Industry
The auto manufacturing industry is global and dominated by a few large companies.
Industry size & Structure
The average auto parts manufacturer employs 155 workers and generates $65 million in annual revenue.
- The auto parts manufacturing industry consists of about 3,700 companies that employ 573,300 workers and generate $241 billion annually.
- Breakeven production for auto parts manufacturers is estimated to be between 13.5 million and 15 million units, according to the Original Equipment Suppliers Association.
- 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.
Industry Forecast
Auto Parts Manufacturers Industry Growth
Recent Developments
Mar 18, 2025 - Advanced Auto Parts Closing 700 Stores
- Struggling retailer Advanced Auto Parts is aggressively moving on a corporate restructuring in early 2025 to turn around years of floundering sales and ranking fourth among its competitors. Its closing of 700 corporate-owned and independent stores represents 10% of corporate locations and 20% of indies. It is also closing four distribution centers and simplifying its supply chain from big distribution hubs to smaller regional hubs in order to get the vast amount of parts the company must carry to customers as quickly as possible. With recession worries looming, auto parts retailers typically benefit from consumers putting off new car purchases in favor of repairing a current vehicle. But the ping-ponging tariff war between the US and its North American neighbors is a wild card that could increase costs and blunt any gain to be had in the auto parts industry.
- Auto industry leaders are increasingly sounding the alarm on the Trump administration’s threats to tariff automobiles, with Ford CEO Jim Farley warning that, “"Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we've never seen.” With prices of new cars already up significantly to an average of $50,000, the effect of tariffs could add an average of $9,000 per car to the cost, according to an Anderson Economic Group analysis of inventory and where cars are assembled and built. Auto manufacturers like Ford and Stellantis are halting production on certain models, and a protracted trade dispute could eventually result in layoffs across the industry. In addition, if the tariffs apply only to Mexico and Canada, carmakers from Japan, South Korea and Germany stand to flood the US market.
- With the US threatening 25% tariffs on Mexico and Canada beginning in March, along with the already 25% tariff it slapped on all aluminum and steel imports, virtually every automotive-related business is facing steep cost increases. Six out of every 10 auto replacement parts are imported from Mexico, Canada, and China (facing its own 10% US tariffs), according to The American Property Casualty Insurance Association. Auto parts in North America frequently cross borders of all three countries - sometimes multiple times - and would be levied with each crossing. If replacement parts and new cars all become more expensive, insurance rates and repair costs will also increase. This could drive consumers to buy used vehicles instead, but those costs would also increase due to high demand. Costs for auto parts had finally fallen after price surges in 2021 and 2022, making the tariff threat particularly worrisome to the industry.
- Employment by auto parts manufacturers fell 1.9% in November 2024 year over year while labor costs increased, according to the US Bureau of Labor Statistics (BLS). Average wages for nonsupervisory employees at auto parts manufacturers were up 12% in November 2024 year over year, reaching $30.07 per hour. The Producer Price Index for auto parts ticked up a slight 0.7% in December 2024 compared to a year ago. That number will skyrocket in 2025 if the Trump administration follows through on 25% tariffs on Mexican and Canadian imports. There is no such thing as an automobile fully made in the US. Virtually all cars contain parts from Mexico and Canada, and billions of dollars worth of auto merchandise crosses North American borders every year. Industry analysts expect tariffs to increase a car’s price by an average of $3,000.
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