Auto Parts Supply Chain Struggles

[Throckmorton]

Auto Parts Supply Chain Struggles

As Washington fights over a plan to rescue Detroit's auto manufacturers, industry experts anticipate a third of auto parts suppliers may go out of business in the next 3 years.
http://video.nytimes.com/video/2008/12/1...&exprod=myyahoo

 

[rg200amp]

I would think they would be ok. Not many people are buying new cars, so we need parts to fix oue old ones.

Perhaps the chain stores will be weeded out, and the [censored] ones will fail.

 

[bullwinkle]

I would bet on the NEW car parts suppliers, such as the plastic injection molders, and some of the steel processors would go under, I would think the aftermarket guys would actually see their business INCREASE from the repairing of used vehicles.

 

[Mr Nice]

With so many people on a tight budget and not wanting to get into more debt, people are keeping their car longer.

With regular maintenance, there is no reason not to keep a late model car till 200K miles.

 

[salesrep]

Auto repair and aftermarket parts manufacturers should do well in the next economy.

 

[Gary Allan]

I don't think that they'll see much more business on average ..at least in the shorter term. The new car purchase just moved the same repairable car to another owner. The agency that it was traded to either fixed it up ..or whomever bought it at the auction fixed it up ..or the person that bought it from the secondary auction buyer fixed it up ..or the private sale buyer fixed it up.

That assumes that the car stayed in service.

Now longer term you may see this work out ..but parts are going to be even more expensive ..or so I would reason. Too many part numbers over too long a span of time.

 

[Kestas]

In the past, when new car sales dipped, aftermarket repair went up. There are many factors at work with the new economy. It's a judgement call how it all averages out. With the new economy:

1. On average, people will hang on to cars longer. This will mean more repairs before the car is given up to the junk yard.
2. People will drive less. Fewer miles mean less repairs.
3. People may put off repairs on their cars... e.g., a/c may not be a priority anymore.

We'll see how this pans out.

 

[CivicFan]

They estimate that 16% of Indiana work force may be made redundant if the Big 3 fail.

A few years ago there were some factories closed that supplied GM in a town nearby and a couple thousand jobs were lost. The community has not recovered yet. The not-for-profit hospital group I work for have since been shrinking their offering in these communities and are in the red: people are unemployed, thus uninsured and thus unhealthy. We have to provide care if they show up in the ER with diseases that are at that point out of hand. So moneys from the other hospitals are used to subsidize the losses in these communities.

I just can't imagine what will happen to us if we lose a lot more jobs in the areas we have hospitals.