How Your Dealership Can Prepare for Auto Parts Tariffs

Navigating the world of tariffs is no easy task. It seems there’s news of changes nearly every single day. But as of May 3, tariffs on auto parts are here even if we don’t know how long they’re here to stay.

Price increases from both the tariffs and other factors are either already happening or just on the horizon. Unfortunately, that means both costs to the dealership and the customer are unavoidable. To better prepare Parts departments, CDK has developed some key strategies to help maintain competitiveness during these economic shifts.

Determine New Costs

Tracking price changes will likely be the first step in any strategy to tackle tariffs. With CDK tools, Parts teams can generate detailed reports that break down the profit margin per part and then highlight the ones with the most significant cost increases.

Then it’ll be crucial to develop a unique pricing strategy based on these new costs. There’s also a way to put in place gross profit protection into your CDK system that warns users if any of the new parts costs push past the percentage you’ve set.

Manage Inventory

A dealership’s Parts inventory should always be well-maintained, tariffs or not. Inventory tracking and forecasting tools allow teams to understand what parts will be needed when and in what volume. Once you’ve accounted for adjusted pricing, there will be a clearer picture of how many high-demand parts you’ll need to have on hand and how many slower-moving parts you can afford to minimize until prices have stabilized.

Develop a Customer Communication Strategy

It’s becoming clear that the public is well aware that tariffs will lead to higher prices across many products, cars and parts included. That doesn’t mean there aren’t steps to take to make sure your customers understand how it’s impacting their bill. Sharing the costs of service and repairs isn’t the most pleasant task to begin with and teams should prepare to explain potential tariff sticker shock. If possible, explain which parts have taken a significant price increase due to tariffs.

There’s likely a small window where parts in stock and certain preventative maintenance can be done now, before price increases happen. Let customers know that unique window exists to persuade them to pull-forward services they might put off until later in summer.

Also, promote American-made products like tires that likely won’t see a price increase. Even some foreign tire brands based in Asia and Europe actually manufacture tires in the U.S. Consider doing a quick count of the tire brands you stock and call out how many are American-made. It could be a very high percentage.

Even if tariffs might last a finite amount of time, taking additional steps like the ones above should set you up for success in this unique moment for the industry.