“Speaking for Alltech, we will absorb as much of the added cost as we can but naturally there are limits,” writes CEO Nancy Liu
As CEO of a global parts supplier, I appreciate the opportunity to provide our perspective on the topic of tariffs. Much of our manufacturing base is located in China and other countries in Southeast Asia, therefore the topic of import tariffs is obviously critical to my company and me.
Our type of business always requires extensive worldwide contacts and deep knowledge of our sources, but the uncertainty of changes in tariffs and regulations greatly complicates the situation.
Of course, we see the ideal solution being an amicable resolution of differences between nations involved, and a return to stable relationships. Until that happens, everyone involved is trying to maintain the most consistent supply of products and the most restrained pricing policies possible. In the short term, tariffs will inevitably add to cost for everyone in the supply chain.
Re-sourcing and especially re-shoring can’t happen overnight and often will require major investments in tooling or even new manufacturing facilities in some cases. Many OE parts installed in new vehicles built in North American were originally sourced overseas and have never been manufactured here.
Speaking for Alltech, we will absorb as much of the added cost as we can but naturally there are limits. Fortunately for Alltech, we have some of the longest and closest relationships in the industry with manufacturing facilities and they also understand the situation. And we know they will also be as accommodating with us as they possibly can, just as we are with our customers.
With some of the possible large tariff percentages we hear about in the news, some price increases would inevitably reach installers and consumers. This does raise real concerns about vehicle maintenance, reliability and even safety — if service that is needed on brakes, steering and suspension is postponed.
Of course, we have all heard the predictions for skyrocketing new car prices due to import tariffs. On one hand, people keeping their vehicles longer can benefit the aftermarket, and we are hoping that this helps keep the aftermarket healthy. On the other hand, declining new car sales can also coincide with an economic recession in which case nobody really benefits.
At Alltech, despite this economic turmoil we are still forecasting a strong 2025 for ourselves and the aftermarket. All we can do is redouble our efforts to keep the supply chain operating smoothly, avoid snap decisions, and focus on long term growth.
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