Months into a new tariffs era, automotive suppliers are still adjusting their strategies.
“We are not overreacting and replacing suppliers left and right,” Sven Hoenecke, executive vice present of purchasing for Forvia Hella, said at this week’s Management Briefing Seminars in Detroit.
Forvia Hella makes vehicle lighting and electronic systems.
Hoenecke said his company dealt with tariffs during the first Trump administration. “In 2018 we learned we had a fair amount of exposure to China,” he said.
During Trump’s second administration, which began in January, the president has expanded tariffs across many countries and products.
The executive said Forvia Hella has worked to develop “short-term, mid-term and long-term strategies.”
Automotive suppliers have had to reach out to their own vendors to determine the point of origin for components and calculate tariff-related costs.
“We had to spend a lot of time we with our own suppliers,” said Megan Hunter, executive vice president, procurement and supply chain operations for Martinrea International. The company designs, develops and lightweight structures and propulsion systems. She spoke at the same session as Hoenecke.
“Tariffs have added stress,” Hunter said.
Tariffs are not levied on other countries. Instead, they are paid by importers. Much of that cost is passed onto consumers.
Tariff levels on cars and trucks may ease while consumers will absorb most of the cost, consulting firm AlixPartners said in June in an annual report.
Hoenecke said auto suppliers may see new U.S. sources of components. “We see the semiconductor industry picking up locally,” he said.
However, rare earth metals are concentrated in China and other countries. “Rare earth minerals are not plentiful in the United States,” Hunter said.
The Forvia Hella executive said he’s still upbeat.
“You have to be flexible,” he said. “We have been working on tariffs for quite some time. I’m very positive. I believe a lot of similar companies like ours are pushing” for more local sources.
The Management Briefing Seminars are organized by the Ann Arbor-based Center for Automotive Research. The center this year moved the seminars from August to mid-September. The seminars had been held at a resort outside Traverse City, Michigan. The 2025 edition was held at Detroit’s refurbished Michigan Central Station.
