Not too long ago the United States Government proposed a 25% tariff on imported auto parts. The general idea behind these tariffs is to encourage domestic automakers to manufactuer their parts in the United States, and encourage foreign automakers to build plants in the United States to create jobs. While we’re still unsure if this tariff will actually happen, both car and parts manufacturers believe tariffs could cause huge changes in pricing in the “short run” both for new cars and for general automotive repairs on the ones you already own – even for domestics.
“American Car” is a Loose Term
You may be thinking “I drive a Chevy/Buick/Ford/Dodge, etc., those are American, why would their parts cost more?” Simply put, because there is no such thing as a 100% American Car. According to Cars.com, 2017’s most American made vehicle was the 2017 Jeep Wrangler, and it was only 74% domestic – which means that more than quarter of the vehicle’s parts or labor involved in the build came from elsewhere. Another example is General Motors. GM is distincly American, but not everything they sell is. Ever since their aquisition of Daewoo and renaming it GM Korea, General Motors has built a slew of vehicles overseas and imported them to the States. The Chevrolet Spark EV, for example, is built in Changwon, South Korea and uses minimal American parts, dispite being a product of the Detroit automaker. Many sedans that Chevy sells are just rebadged Holden vehicles, an Austrailian automaker GM owns.
This also happens to work in reverse – many Japanese cars can qualify as “highly American.” Honda Ridgeline was the 4th most American vehicle according to the Cars.com list – It is built in Alabama with many American made parts. Honda has even exported things it’s built in the USA to Japan, like the K20C1 engine it uses in it’s Type-R Civics.
Almost every vehicle on the street, American or not, uses some American and some foreign parts.
When it comes time to replace those foreign parts, the cost will most likley be transferred to the consumer.
Everyone – Dealer, the auto parts store, Mom-and-Pop-Shop and the DIY dad who works on his car every Saturday could pay more. Dealers, who install parts built directly by the manufacturers will take a large blow in price since their foreign parts are imported from their own factories, but local independent shops and your local auto parts stores will too, as many aftermarket parts manufacturers outsource. According to the journalism site Automotive News, The companies behind the North American branches of Michelin, Sumitomo, and Cooper, sent joint letter to the Commerce Department warning that higher tire prices could cause consumers to wait too long and cause an uptick in tire-related accidents. Long story short – parts won’t be cheap for anyone.
Labor rates accross the board should remain the same, but don’t be suprised to pay more for car repairs, even if you do it yourself.
If you have any questions about auto repairs, pricing, and general automotive issues, feel free to call us at 704-545-4597.