The automotive aftermarket is navigating a minefield of economic uncertainty, with global trade tensions and supply chain disruptions creating significant challenges for businesses, an industry expert recently told a conference.
As trade tensions continue, automotive aftermarket businesses are being forced to make strategic decisions about where and how they source parts, with quality and cost remaining critical factors, explained Michael Chung, senior director of market intelligence at Auto Care Association.
A survey by the Auto Care Association found that nearly half of businesses are feeling negative about their economic outlook, with tariffs and international trade complications creating a complex landscape for manufacturers and suppliers.
“Half of the respondents say, ‘I just have no idea what’s going on,’” Chung said during Auto Care Connect, a conference hosted by the association in Phoenix, highlighting the level of uncertainty within the industry.
The survey showed that members have critical concerns about manufacturing locations, with businesses struggling to adapt to rapidly changing trade environments. Olivia Newton, vice president of category management at N.A. Williams Company, highlighted the complexity of shifting production.
“When you think about moving manufacturing facilities, it’s not simple,” Newton explained. “You’re dealing with regulatory requirements, identifying trained employees and understanding complex economic factors.”
The challenges are particularly acute for smaller businesses dealing with parts for increasingly complex vehicles. Chung noted that aftermarket manufacturers are producing lower quantities of parts at lower price points, making international trade shifts particularly difficult.
The Red Sea shipping disruptions have further complicated matters, significantly impacting global container traffic. Approximately 30 per cent of global container traffic has been affected, creating additional logistical headaches for businesses.
However, Newton stressed the industry’s resilience.
“Our businesses have gone through the pandemic and these challenging times,” she said. “We’re used to adapting.”
Image credit: Depositphotos.com
Leave a Reply