The automotive aftermarket sector is proving its resilience in the face of tariffs, but feedback from suppliers shows many of them are struggling to stay profitable as costs and uncertainty mount.
The industry has weathered the storm of tariffs better than many expected, noted Paul McCarthy, president of MEMA Aftermarket Suppliers. But not without significant pain. Speaking during a third-quarter media call, McCarthy highlighted both the strength and the struggles of the sector as it deals with ongoing trade challenges.
“It’s kind of amazing how well the aftermarket has held up despite tariffs,” he observed. “I mean, our sales, if you look at the publicly listed folks who’ve announced, it’s impressive, frankly. And the aftermarket is always resilient.”
But McCarthy was quick to point out the heavy burden tariffs have placed on suppliers.
“One thing that can’t be overstated: The enormous cost and time for tariff compliance and analysis — so just the number of people, the time, the cost and the opportunity cost that this has taken suppliers,” he said.
He referenced an internal survey conducted by the association with its member companies. It painted a sobering picture: 42 per cent of suppliers said they don’t expect to make money this year. Some may break even but many are falling short.
“Certainly a lot of missed plans across the industry, and it’s led to some cost-cutting initiatives,” McCarthy noted.
He further shared direct feedback from members, highlighting the emotional and financial toll, with one noting it’s been a year of body blows.
“Thankfully, they’re not knockout blows. They’re body blows thanks to the aftermarket’s resilience, our nimbleness,” McCarthy said.
Other comments included that suppliers are dealing with volatility every day, that it’s hard to plan, cash flow and margins are being hit even though sales are “fine.” Then there’s the complexity of the tariffs and dealing with changing policy is becoming overwhelming.
“People burned out, people exhausted from dealing with the next tariff hit,” McCarthy explained. “A lot of people focused on non-value-added work related to the headlines, rather than to where we all should be.”
Looking ahead, McCarthy said the industry is still trying to determine if the current situation is a short-term disruption or a sign of longer-term change.
“So will this ultimately just be near-term disruption and price adjustment and some new government revenue to offset deficits, or does this mean that there’s more to come, and this will be a longer-term story?” he wondered.
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