Auto Parts Manufacturers NAICS 3363

Aug 14, 2025 - Americans Driving Current Vehicles Longer

• Americans are driving their current cars and trucks longer, which might be bad news for automakers and dealerships, but is a potential boon for the aftermarket and repair industries. According to S&P Global, the last two years have seen a steady increase in vehicle age, with Americans keeping their cars for 12.8 years on average while pickup trucks last 14 years. Reasons for longer auto life include saving money in the face of higher new car prices, as well as engineering advances that can keep a well-maintained car on the road longer. Scrappage rates - the percentage of vehicles removed from operation - have held steady despite new vehicle registrations topping 16 million in 2024. Both statistics indicate an aging American fleet on the roads. Maintenance demands are expected to soar in the coming years if the trend holds and car prices continue to rise.
• Employment by auto parts manufacturers fell 4.4%% year over year in May 2025 while labor costs increased, according to the US Bureau of Labor Statistics (BLS). Average wages for nonsupervisory employees at auto parts manufacturers were up 8.1% in May year over year, with the average hourly salary clocking in at $30.01. The industry faces significant headwinds going into the latter half of 2025 due to the Trump administration’s 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.

• With electric vehicle (EV) mandates being rescinded and demand for EVs falling, manufacturers who revved up battery production as a result have found themselves in search of different markets for their products. The large-scale battery storage industry - used by utilities, giant data storage centers, and wind and solar power providers - is quickly becoming the target for battery makers rather than carmakers. A rush of battery plant construction over the last five years in the American South and Midwest have left the properties underused or delayed altogether. Tesla’s revenue from battery storage systems grew a massive 67% last year to $4 billion. General Motors plans to supply new and used batteries to energy storage startups. These energy storage systems are designed to provide back-up power in case of emergency, a market that has tripled from 2021-24 and is expected to grow 35% in 2025, according to consulting firm Wood Mackenzie.
• A US trade war with China is affecting car manufacturers in numerous ways, with one of the most challenging being China’s near total control over rare-earth magnets necessary for electric vehicle (EV) manufacturing and certain traditional car systems (and virtually all other electronics). China controls 90% of rare earth metals such as dysprosium and terbium, elements used in magnets so they operate at high temperatures. Exports of rare-earth magnets from China have all but halted since April amidst the tariff squabble with the Trump administration. Auto manufacturers worry they can’t keep production lines moving without the magnets and might have to shut down production. Some are considering outside-the-box solutions including shifting all engine production to China, or shipping American-made EV engines to China so the magnets can be installed. Any of those options will run afoul of Trump’s trade goals and would significantly increase costs already high due to tariffs.