According to foreign media reports, Autoliv, the world’s largest supplier of seat belts and airbags, said the company will not bear any additional costs caused by US President Trump’s tariffs, and warned some auto suppliers It may suffer financially and may not survive.
Trump has ordered a 25% tariff on cars, auto parts and almost all other products imported from Canada and Mexico to the United States, and a 10% tariff on products imported from China. If other countries take countermeasures, it will trigger the United States to further impose tariffs.
Ottoliv’s chief financial officer Fredrik Westin said Ottoliv would not bear the additional costs of U.S. tariffs and decisions on how to deal with the additional costs need to be made promptly. “Ultimately, both our customers and end consumers will have to bear these additional costs across the entire value chain.”
Some auto suppliers may not be able to withstand the impact of U.S. tariffs. “Not every business in the supply chain has the best financial situation, and some businesses may not be able to survive the scale of the U.S. tariffs we are talking about for a long time,” Fredrik Westin said. The increased costs will make Several suppliers have difficulty meeting their short-term financial obligations. “Raising working capital can be a problem.”
On February 3, Evercore ISI, the world’s leading independent investment banking consulting firm, said Ottoliv, Irish auto parts supplier Ampoulefu and Lear, the largest U.S. car seat and electronic systems supplier, the biggest U.S. car seat and electronic systems supplier, are the most affected by U.S. tariffs. Business profits may be reduced by 8% to 15%.
However, on January 31, Ottoliv predicted that despite geopolitical uncertainty, its profit margins will rise in 2025. It is reported that one-third of Ottoliv’s global sales come from the Americas. The company has five factories in Mexico, four in the United States and two in Canada.
Fredrik Westin believes that with the company’s diversified global layout, Ottolif can achieve localized procurement and production of up to 85% of products in various markets, thus achieving its goal of rising profit margins in 2025.
“If we need to increase production in a region due to tariffs or other geopolitical issues, we can do it very quickly. However, this is even more tricky when it comes to customer-specific product configurations, because this Need approval from customers.”
Jerome Dorlack, CEO of car seat supplier Andorto, said the company expects U.S. tariffs will have a significant financial impact, but the company will not bear additional costs.
Canadian auto parts supplier Linama said auto suppliers will not be able to pass on U.S. tariff costs to customers. Linama has 24 factories in Canada, 6 in Mexico and 17 in the United States, most of which produce automotive parts. Linda Hasenfratz, chairman of the company, said some of the company’s auto parts cross-border as many as seven times before they are finally assembled into a complete vehicle, and import tariffs only increase the cost of the vehicle.
“No car supplier can afford such costs. They can’t pass on these costs to consumers, and consumers won’t accept it. No one will buy a car that is much more expensive than usual,” Linda Hasenfratz said.
A recent study by TD Economics said U.S. tariffs will increase retail prices for new U.S. cars. Mexico’s National Suppliers Association warns U.S. import tariffs on Mexican and Canadian products, including auto parts, will increase the average selling price of U.S. cars by about $3,000 and could reduce U.S. auto sales by 2025 by 1 million .