American Recycler JUN25 / Read original article
Tariffs are triggering the biggest shakeup in global car manufacturing in decades. As the tariff conversation continues to unfold, missing from a lot of discussions is what the tariffs mean for businesses across the automotive recycling industry. Will tariffs help or hinder auto recyclers looking to improve their bottom line during these tumultuous times?
According to a study by RapidDirect, China dominates the global automotive manufacturing industry, producing over 30.16 million vehicles annually across 124 companies. The country is now facing 125 percent U.S. tariffs that could reshape its export strategy. Japan follows second, producing 337,627 vehicles per company across 23 car companies, with over 7.7 million total vehicle production annually. Japan is also now navigating tariff impacts that could reduce profits by 6 to 59 percent, according to Goldman Sachs.
Paul Delaney, chief visionary officer of Fenix Parts, says the proposed tariffs will be beneficial, specifically for the used parts market.
“A large percentage of the OEM and aftermarket parts with which used parts compete are produced outside of the United States and will become more expensive due to the tariffs,” Delaney said. “Used parts are sourced from vehicles that are already in the United States and will therefore not have to bear the impact of this additional cost. The result is that the value proposition of used parts – OEM quality at a much lower price – is even more compelling than normal.”
With the potential pullback in consumer spending due to tariff uncertainty and the rise in new car prices, Delaney said consumers may keep their cars longer, and therefore, there will be more need for repairs.
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