The demand for car spare parts in the United States has been steadily on the rise. A number of important factors are feeding this need. The first is the sheer number of vehicles on American roads – 290.8 million by the end of 2022, to be exact. Couple this with the fact that Americans seem to be choosing to drive their cars for longer rather than buying new ones (new car sales declined by about 8% to 9% in 2022, hitting their lowest level since the post-great recession of 2011) and the result is more cars than ever that need to be repaired and maintained. These vehicles require a constant supply of spare parts to address wear and tear, accidents, and, for the DIY car enthusiasts, the continuous quest for vehicle performance enhancement.
Even though about 8.8 million cars are currently built in the US annually, and with 55.4 billion dollars worth of automotive exports per year they are the third biggest exporters of cars in the world, the growing demand for spare parts can’t be met by local manufacturers alone. The automotive supply chain is highly complex, and this is exacerbated by the sheer variety of car models and brands available in the US, many of which are manufactured in a number of different countries. This means that many components can only be sourced from the country in which the vehicle was built. Additionally, there is a range of specialized electronic components and precision-engineered parts that are made in only one or two countries and have to be imported when needed.
The bottom line is that importing often becomes the only way to meet the diverse demands of the American automotive market. The latest available figures show that in 2020 the US imported over US$131 billion in automotive parts – almost matching the $139 billion in car imports.
Clearly importing car parts into the US is a growing trend. This blog will look at exactly what steps you need to take to navigate this somewhat complicated process.
Factors to Consider Before You Start
You are ready to import that all-important part, but where do you begin? There are a number of choices to consider before you even start looking for a supplier.
Importing from the Manufacturer vs. a Distributor
Importing automotive spares parts directly from the manufacturer is usually cheaper, but it can be more difficult to find a supplier who has everything you need and is reliable – they are not really customer-facing, and it can be difficult to get responses and follow-up. If you import car parts through a distributor, there will be a wider range of products to choose from and the company will be geared towards sales, making them more likely to be responsive and helpful. However, this option is usually more expensive.
You need to weigh up whether wider availability and customer service are more important, or if cost is the major driver of your purchase.
Mode of Transport: Air Freight vs Ocean Freight
Air freight is the most common method of shipping automotive parts, largely because they tend to be smaller. Air freight is fast and efficient, and is the quickest way to get your parts, but it is also expensive so it is important to weigh the cost against how urgently you need the part. Ocean freight, on the other hand, is more affordable, but is much slower, and there can often be delays. It’s best to use this method if your purchase is not time-sensitive.
There are a number of bodies in the US such as the National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) that set quality standards for vehicles and vehicle parts, and these apply to parts that are being imported into the country as well. It’s important to make sure that the parts you are buying meet all requirements. You will need to get all the necessary information from your chosen supplier who can help you understand what is needed and guide you to the best parts.
Which Country Is Best For You?
When it comes to importing automotive parts you are spoiled for choice, with over 21 countries to choose from. The top biggest car part exporters to the US are Mexico (38% of all imports of automotive parts into the US), Canada (10% of all imports), and China (9.5%), but Japan, Germany, and South Korea are also good options. Each is known for a different strength or benefit. For example, Germany is known for its high-quality automotive engineering and focus on high-performance or luxury vehicles. China has a wide range of both electronic and engine components and highly competitive prices. Your choice will be based on a combination of cost, quality, and availability considerations.
Now You Are Ready
Steps to Importing Automotive Parts
- Sourcing Your Supplier
- Identify The Correct Harmonized Tariff Schedule (HTS) Codes
- Prepare Your Documentation
- Prepare Your Documentation
- Receive Your Goods
Finding the right supplier can often be the difference between a successful or unsuccessful endeavor. It is difficult to find what you need when you are working in an unfamiliar market, and where you may not speak the language. Conduct extensive market research to identify potential suppliers, potentially asking other importers whom they have used. Online platforms can be very useful for this and can help you evaluate potential suppliers on their reputation, their communication and responsiveness, and obviously their capacity to meet your requirements. Once you've identified a suitable supplier and have negotiated the price, make sure that you agree, in writing, to payment and delivery terms as well as quality standards.
Determining the correct HTS codes for the imported automotive parts is important because it determines the amount of import duties and taxes you will need to pay. An incorrect code can also hold up customs clearance and even result in the confiscation of your goods. Car spare parts cover a wide range of products, and each will have its own unique HTS code. Make sure you refer to the HTS codebook or try our new tool designed to make it easy to identify the right HTS code.
The part everyone loves the most - working your way through all the documentation needed for a smooth and efficient import process. Here are the key documents you need to prepare:
Bill of Lading, which identifies the shipment, including details such as the shipper, consignee, and description of the car spare parts.
Commercial Invoice which specifies the price, currency, and payment terms agreed upon as well as details of the car spare parts, such as quantity, description, and unit price.
Packing List which must provide a comprehensive breakdown of the contents of each package or container.
Certificates of Origin may be needed for certain car spare parts, especially when they are being imported under preferential trade agreements.
Certificates of Compliance are needed if spare parts are subject to specific regulations or standards, such as safety or environmental standards.
Importer Security Filing (ISF) if your goods are being transported by ocean freight. In this case, it is a mandatory document that must be filed 24 hours before your parts are loaded onto the ship. Depending on the nature of the car spare parts and any specific regulations or agreements, you may need additional documentation, such as technical documentation, insurance documents, permits and licenses, and transportation documents. Ensure that you understand the specific documentation requirements for the car spare parts you are importing. Accurate documentation is crucial for smooth customs clearance and compliance with all import regulations.
Whether you are using a customs broker or doing it yourself, customs clearance involves submitting all the necessary documentation. Once the US Customs and Border Protection (CBP) has assessed all duties and taxes owed, pay them promptly to avoid delaying the process. Once customs clearance is completed your goods will be offloaded at the port of entry.
Liaise with the port of entry to find out when your goods will be available, and arrange to pick them up from the port of entry or have them delivered to your location. Make sure you do a close inspection to verify that you have received the parts you ordered and that they meet all the specifications agreed upon. And then you are ready for business.
EezyImport: Leading You Through the Process
Importing car parts can be a rewarding venture, but it requires careful planning and ongoing attention to detail to ensure that it’s successful. Fortunately, eezyImport’s suite of tools is designed to assist you in making the import and customs clearance process as simple as possible. With our easy-to-use, innovative customs and global shipping solutions, you will be able to quickly navigate the complex world of logistics. Our DIY filing system saves you time and money, but don’t worry you aren’t left to figure it out on your own. A whole host of resources and support are at your fingertips, including an HTS tool to assist in accurate code identification. Contact us now to find out more.