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Any imposition of import tariffs on cars/car parts would severely impact suppliers in the Tier 2 segment where many businesses already show thin margins.

Small basic component parts producers often suffer from poor equity, while at the same time they face increasing difficulties obtaining bank finance.

While the automotive insolvency level has been low compared to other industries in the past, an increase of up to 3% is expected in the coming 12 months.

Suppliers active in the combustion engine parts and car metals segments are severely affected by deteriorating demand and a high level of competition.

US tariffs could severely impact Japanese suppliers of low value added/basic car parts, as OEMs could replace their products with tariff-free items.

Local-owned Tier 2 suppliers remain susceptible to commodity price changes and exchange rate volatility, with limited options to pass on higher prices.

Higher costs, reduced orders, price pressure and changes in the type of products demanded could put the finances of many smaller suppliers under stress.

Insolvencies are expected to increase by about 3% in the coming 12 months, mainly affecting car dealers, car part distributors and Tier 2 suppliers.

Larger suppliers could seize the opportunity of buying distressed smaller players in order to expand market share and bargaining power against OEMs.

Corporate insolvencies are on the rise globally due to the more challenging economic environment and high policy uncertainty.