Auto Parts Retailers NAICS 441330

Sep 29, 2025 - Major Auto Parts Maker Goes Bankrupt

• First Brands Group, a major US auto parts supplier known for Fram and Raybestos brands, has filed for Chapter 11 bankruptcy, citing $10 to 50 billion in liabilities mainly from years of aggressive expansion. While primarily serving the aftermarket sector, its collapse could ripple through the industry, potentially causing supply disruptions, higher retail prices, and increased pressure on other suppliers with similar debt levels. US tariff policies have added to the complexity, which was already causing significant financial strain throughout the automotive industry. Other ramifications include retailers facing possible inventory gaps, and consumers could see higher prices as companies steer through the ups and downs of a constantly moving trade policy. The First Brands bankruptcy underscores the vulnerability of the US auto parts sector to both financial missteps and an ongoing American trade war.
• The Producer Price Index for auto parts retailers jumped 9.9% year over year in May 2025, per the US Bureau of Labor Statistics, with demand growing for auto parts due to Trump administration trade policies and the resulting reduced supply of foreign-made parts and supplies. In addition to direct levies on auto parts, other tariffs such as the 25% import duty on aluminum and steel have an indirect effect on increasing wholesale and retail prices. Demand has also increased for auto parts because some consumers are opting to drive their current cars longer in the face of price hikes on top of an already historically high average for new car prices ($48,000 per Cox Automotive). Increasing the life of an automobile saves the consumer on a big-ticket purchase, but translates into more money spent on parts, repairs, and maintenance.

• After the Trump administration’s 25% tariff on imported auto parts went into effect in late April, the government altered the levies to soften price shock and give the industry more time to adjust. The new auto part tariffs offer a partial reimbursement to manufacturers during the next two years if the final assembly of an automobile is in the US, regardless of the parts’ origin. The rebate will be 3.5% relative to the sales price for domestically assembled vehicles for the first year, and then fall to 2.5% for the second year. It also prevents secondary tariffs on other products, like aluminum and steel, from stacking up on an automaker. Despite this, automobile cost hikes will still be significant due to the tariffs, anywhere from $2,000 for the least impacted cars up to $15,000 for the most, according to an Anderson Economic Group analysis.
• 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.