The automotive aftermarket sector has faced a flurry of bankruptcy filings despite some firms in the industry experiencing an increase in business when interest rates began to spike over the last three years.
Demand for auto parts grew since 2022 as interest rates increased, which discouraged consumers from buying new vehicles. Consumers believed it was more economical to invest in repairing their vehicles and extending the life of their cars and trucks, which called for the purchase of new auto parts, than to add a huge expense of a new car to their budget.
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The automotive aftermarket sector has faced less of an impact in recent economic downturns, according to a 2022 report from KPMG. Following that report, however, several auto parts suppliers with huge debt obligations suffered from rising interest rates and inflation and were forced to file for bankruptcy.
Related: Huge auto parts brand files for bankruptcy liquidation
Some were also able to downsize their operations to cut expenses without filing for bankruptcy.
Last year, Wheel Pros, which operates as auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter 11 bankruptcy on Sept. 9, 2024, to eliminate $1.2 billion in debt and provide about $570 million in new capital through an exit facility.
A month later, Accuride Corp., another leading manufacturer of wheels and wheel-end products for commercial trucks and trailers, filed for Chapter 11 bankruptcy protection on Oct. 9, 2024, seeking a consensual restructuring of its debt to continue operating as a going concern.
Advance Auto Parts closes hundreds of stores
The automotive aftermarket sector didn’t get much better in 2025 as distressed auto parts retailer Advance Auto Parts, which operated nearly 5,000 retail stores, accelerated its strategic turnaround plan to close 727 corporate-owned and independent locations, as well as four West Coast distribution centers, by the end of March.
The auto parts retailer had revealed in November 2024 that it planned to close the stores and distribution centers by mid-2025 and lay off a significant number of its 65,000 employees.
Advance Auto Parts did not file for bankruptcy.
Northvolt AB, which makes electric vehicle batteries for several carmakers, including BMW, Audi, Porsche, Volvo, Polestar, and Swedish truckmaker Scania, obtained a bankruptcy court order to dismiss its Chapter 11 case after it filed for bankruptcy liquidation in Sweden a few weeks ago, Electrive reported.
The Stockholm-based debtor had filed for Chapter 11 bankruptcy protection on Nov. 21, 2024, seeking a going-concern recapitalization or sale of its assets as it faced an acute liquidity crisis.
Northvolt’s restructuring and reorganization plans failed and there was reportedly little hope for the battery manufacturer to recover. It decided to follow through with liquidation in Sweden in March, before seeking the Chapter 11 dismissal.
Hypertech, which sells its auto parts through several national retailers, files for Chapter 11 bankruptcy. (Photo by: Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images)
Jeff Greenberg/Getty Images
Hypertech files for bankruptcy protection
Finally, motor vehicle parts manufacturer Hypertech Inc. and two affiliates filed for Chapter 11 bankruptcy protection on April 11 to reorganize their businesses.
Related: Iconic furniture chain shuts troubled store, no bankruptcy plans
The Memphis, Tenn.-based manufacturer of automotive performance electronics and components, filed its petition in the U.S. Bankruptcy Court for the Middle District of Tennessee, listing $1 million to $10 million in assets and liabilities.
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The debtor’s largest unsecured creditor is Innovative Circuits Inc., with a claim over $212,000. Several merchant cash advance firms have filed disputed claims, according to the petition.
Hypertech and its affiliates High Point and SF Technologies sell their products through Auto Zone, O’Reilly Auto Parts, and Advance Auto Parts stores, as well as Hypertech dealers nationwide. The company provides auto parts for General Motors, Ford/Lincoln, Stellantis, Toyota/Lexus, and Nissan vehicles.
Among the motor vehicle parts that it provides are In-Line Speedometer Calibrator modules, React throttle optimizers, Spectrum power programmers, tire pressure monitor systems, Smart Shore Marine accessories, and Roost Dirt Sports accessories.
The company has also operated under various other trade names, such as AW Hi-Performance Auto Sales and AW Ramsey Automotive Electronics.
Related: Popular fast-food chain franchisee closes restaurant locations
