While U.S. auto parts suppliers employ over three times as many people as the vehicle assembly sector, auto parts employment continues to trend downward as import levels continue to swell. The market share of the Big Three U.S. vehicle producers has fallen steadily from 73% in 1996 to under 52.2% n October of 2005. In turn, vehicle imports and U.S.-based production of foreign nameplates has grown substantially, picking up 8 and 7 percentage points of market share, respectively, since 1995. This has resulted in a changed customer mix for many supplier companies. With continued strong growth in parts imports, U.S. parts makers are facing calls by automakers to accelerate and pass on cost savings in parts production. In this Chicago Fed Letter, the authors examine trends in the trade of motor vehicle parts. They detail the magnitude of U.S. imports and exports of auto parts, the specific types of parts being traded and the countries of origin and destination. Finally, they identify challenges for U.S. parts suppliers in the years ahead.