News - 2025 China (Hangzhou) International Automobile and Motorcycle Parts Industry Expo

In mid to late September 2025, the global auto-parts sector witnessed a convergence of regulatory shifts, supply chain pressures, and strategic realignments. These developments are reshaping how suppliers and OEMs plan for resilience in an increasingly volatile landscape.

1. U.S. Eyes New National Security Tariffs on Auto Parts

On September 16, the U.S. Commerce Department announced it would consider industry petitions to impose additional tariffs on imported auto parts under national security grounds. Although 25% tariffs on vehicles and parts are already in place, this move signals that more product lines may soon be added to restricted lists—expanding regulatory risk for global suppliers.

At almost the same time, the U.S. issued an interim rule to include automobile parts under Section 232 tariffs via a quarterly inclusion process. This mechanism allows parts to be flagged for added tariffs, effectively giving domestic producers more leverage to push for protection.

These twin moves heighten uncertainty for parts exporters, especially from Asia and Europe, and may accelerate localization or nearshoring trends.

2. EU-U.S. Tariff Deal Formalized Reducing Trade Uncertainty

On September 24, the U.S. formally implemented a trade accord with the European Union, cutting tariffs on autos and auto parts from 25% down to 15%, retroactive to August 1, 2025. This step ends months of speculation and provides relief for European suppliers exporting into the U.S., restoring partial predictability to transatlantic automotive trade.

The timing also underscores how rapidly geopolitical and trade policy shifts can alter competitive dynamics in the auto-parts domain.

3. Cyberattack Cripples Jaguar Land Rover, Rippling Through Suppliers

A major story during this period was the ongoing fallout from a cyberattack on Jaguar Land Rover (JLR) that began in late August and extended into September. The breach disrupted JLR’s operations across multiple countries, sending shockwaves through its just-in-time supply chain.

To protect its supplier base, the UK government is exploring emergency procurement of parts from JLR’s 700+ direct suppliers, mitigating the risk of supplier collapse in the interim. The attack served as a stark reminder that digital security failures can instantly cascade across supply networks in the automotive world.

4. Supply Stability Amid Softening FDI — INA Reports Resilience

In Mexico, part manufacturer INA (a major bearing and precision component supplier) reported that despite a decline in foreign direct investment (FDI) in the first half of 2025, its operations have remained stable. The report points to underlying demand in both aftermarket and OEM channels, partially insulating it from investment volatility.

This demonstrates that some segments of the auto-parts supply base still sustain themselves even under capital stress, particularly when they are entrenched in regional manufacturing ecosystems.

5. Production Forecasts Upgraded Amid Strength in China & North America

S&P Global Mobility released updated global light vehicle production forecasts, revising upward due to robust growth in Greater China and North American markets. Europe also saw modest upward revisions, helped by optimism from easing export tariffs to the U.S.

That said, growth in EV production was tempered by persistent demand headwinds. Nonetheless, the overall upward trend in vehicle output gives parts suppliers some tailwinds for capacity planning.

6. Strategic Realignment — Bosch Cautions of Rising Competition

Bosch CEO Stefan Hartung warned on September 9 that competitive pressures in the auto-parts sector would intensify into 2026, driven by margin squeezes, tariff uncertainty, and the advent of new technologies. He emphasized that the sector is still undergoing structural adjustments, especially in Europe where demand softening and energy costs weigh heavily.

Bosch’s message reflects a broader caution among major tier-1 suppliers: invest wisely, differentiate technologically, and avoid overexposure to geopolitical risk.

Why These Developments Matter

Tariff volatility is escalating: The U.S. moves to broaden auto parts under national security tariffs while simultaneously reducing tariffs with Europe show how unpredictable trade policy has become.
Digital risks are existential: The JLR hack revealed how a cyber incident at one automaker can jeopardize the viability of suppliers across continents.
Resilience and localization are accelerating strategies: Suppliers are likely to inch production closer to key markets to mitigate cross-border tariff exposure.
Capacity planning must be nimble: Mixed signals—some upward vehicle forecasts, some economic headwinds—mean flexibility in operations and scale is critical.
Margin pressure is intensifying: With tariffs, inflation, and competitiveness squeezing suppliers, only firms with strong differentiation or scale may survive.