Hopkins Manufacturing Corp. could move its supplier network China to factories in Taiwan. Multi Parts has stopped accepting employees. AutoZone Inc. and O & # 39; Reilly Automotive Inc. intend to raise prices.
Companies in the autoparts parts industry, from component manufacturers to local machine shops, struggle with the president's rates. United States, Donald Trump , about imported Chinese goods and materials. High fees have already increased the cost of some steel and aluminum products and more tariffs can affect hundreds of other items that these companies develop, produce and sell, such as tires and rearview mirrors, windshields and windshield wipers.
O & # 39; Reilly, based in Springfield, Mo., has not yet seen a "big impact", but some vendors have added a "fractional" part of the cost to the costs and others will do so at the beginning of the fourth. quarter, said chief executive, Greg Johnson, during a teleconference on the company's revenue in the second quarter. So far, "we have been able to transfer that" to customers, he added. Among them are the owners of vehicles that carry out repairs themselves and service technicians who shop in more than 5,000 O & # 39; Reilly stores.
Sales and profit
Investors and analysts wonder how rates will affect sales and profits. Dozens of companies, such as Daimler AG, Hyundai Motor Co. and General Motors Co., have announced that they are already seeing or expecting higher prices to drive up production costs or reduce profits.
AutoZone identifies products that may soon cause problems for the company in Memphis, Tennessee, which has more than 5,500 stores and a $ 10.9 billion turnover last year. Prices for steel parts, such as rotors and other brake components, will certainly have to go up, said spokesman Ray Pohlman.
"The things we sell are not available in many places," he added. "You can not just buy them in every corner."
Although the threat of rates is large, it can actually affect less than 15% of retailers' stock, according to Seth Basham, an analyst at Wedbush Securities Inc .: auto parts stores extract 50 to 60% of their products from China, but only from 20 percent to 25% of these are listed in the final round of rates, he said. The tariffs cover a wide variety of imports with a total value of more than US $ 200,000 million and will only take effect after the end of the comment period on 6 September.
"We believe that they should be able to pass on the additional costs to customers without having too much impact on their profits," Basham said.
Some component suppliers are less optimistic. Brian Cohn, president of Multi Parts, based in Jupiter, Florida, said that the typical flow of orders from the company has already slowed and that higher prices for materials have led to the stopping of hiring employees. The Multi Parts facility in Shanghai, Hong Kong and Belarus produces brake cylinders and wheels, wheel hubs, valve timing solenoids and other components. Among its customers there are parts dealers and other manufacturers of products for car repairs.