The upcoming implementation of a 25% tariff on imported automobiles and auto parts poses significant challenges for U.S. and Canadian manufacturers, but utilizing an ERP system like SYSPRO can help improve visibility, inventory management, quality control, and supplier collaboration to maintain profitability and competitiveness.
The recent implementation of a 25% tariff on imported automobiles, effective April 3, 2025, and a similar tariff on auto parts scheduled to take effect on May 3, 2025, presents significant challenges for auto parts manufacturers across the U.S. and Canada. The pressure to maintain profitability amid rising costs is real, and the ability to pivot quickly has never been more critical.
But with the right tools and strategies, manufacturers can not only survive auto tariffs, but thrive. Here’s how adopting the right ERP system—like SYSPRO ERP—can help you remain resilient and competitive.
Understanding the Challenge
New auto tariffs mean higher costs. Whether you’re producing components for heavy-duty vehicles or precision parts for passenger cars, your profitability is at risk. The implications are broad and impactful:
- Increased Production Costs: Materials imported from overseas now come with a steep surcharge, squeezing profit margins and making it harder to stay competitive.
- Supply Chain Disruptions: Tariffs can force manufacturers to seek alternative suppliers or adjust their sourcing strategies, leading to delays and increased expenses.
- Compliance and Quality Control Risks: As manufacturers try to cut costs, maintaining strict quality standards and adherence to regulations becomes a tougher balancing act.
These challenges call for a solution that offers visibility, flexibility, and efficiency across your entire operation. Enter: SYSPRO ERP.
How SYSPRO ERP Can Help Auto Parts Manufacturers Stay Resilient
SYSPRO ERP is designed to address the unique pain points of auto parts manufacturers. From enhanced supply chain visibility to improved inventory management, SYSPRO ERP provides the tools you need to adapt and excel.
1. Complete Visibility from Shop Floor to OEM Door
With auto tariffs driving up costs, having full visibility over your operations is more critical than ever. SYSPRO ERP provides real-time insights into every stage of your manufacturing process—from raw material acquisition to OEM delivery.
- Track Inventory: Monitor stock levels and avoid costly overstocking or stockouts.
- Streamline Production: Optimize workflows and improve efficiency across the board.
- Monitor Supplier Performance: Identify reliable suppliers and pivot quickly when disruptions occur.
Case Study: Active Exhaust Corp. leveraged SYSPRO ERP to automate handoffs between systems, achieving complete enterprise-wide visibility. This automation reduced waste, decreased errors, and improved accuracy from quoting through design to shipping.
2. Optimized Inventory Management
Effective inventory management is essential when dealing with rising costs. SYSPRO ERP offers robust inventory optimization tools that help you maintain the perfect balance—minimizing costs while ensuring availability.
- Automated Replenishment: Avoid overstocking and reduce holding costs.
- Predictive Analytics: Use historical data to forecast demand accurately.
- Centralized Control: Manage inventory across multiple locations seamlessly.
Case Study: Performance Machine implemented SYSPRO ERP to gain better control over inventory and production processes, resulting in improved efficiency and reduced operational costs.
3. Proactive Quality Management
Quality control has never been more important. As costs rise, the margin for error shrinks. SYSPRO’s Quality Management module ensures your products meet stringent regulatory standards and customer expectations.
- Enhanced Traceability: Track materials from receipt to delivery, ensuring compliance and building trust with OEM partners.
- Automated Quality Checks: Detect errors early to minimize costly recalls or rework.
- Regulatory Compliance: Stay compliant with North American standards and avoid penalties.
Case Study: Toyota Racing Development (TRD) utilized SYSPRO ERP to integrate all departments of their business, enhancing visibility and control over their manufacturing processes. This integration led to improved efficiency and streamlined operations.
4. Strengthening Supplier Collaboration
With supply chains under pressure, strong relationships with suppliers are critical. SYSPRO ERP helps manufacturers enhance communication and collaboration, ensuring consistency and reliability even when sourcing strategies shift.
- Supplier Performance Monitoring: Rate and compare suppliers based on delivery times, quality, and cost-effectiveness.
- Diversified Sourcing: Reduce risk by establishing relationships with multiple suppliers.
- Real-Time Reporting: Make informed decisions with up-to-date supplier performance metrics.
Case Study: Active Exhaust Corp. improved supplier collaboration through SYSPRO ERP’s integrated systems, allowing seamless communication and data exchange, which led to more reliable and efficient supply chain operations.
The Bottom Line: Stay Resilient and Competitive with SYSPRO ERP
The 25% tariff presents undeniable challenges for auto parts manufacturers, but it also offers an opportunity to enhance your operations and emerge stronger. By leveraging the tools and capabilities of SYSPRO ERP, you can improve efficiency, strengthen your supply chain, and maintain profitability—even under pressure.
Note: The case studies mentioned above are based on real-world implementations of SYSPRO ERP in the automotive manufacturing sector, demonstrating tangible benefits in operational efficiency and cost management.
Steve Bassaw
