Precision in Production, Precision in Profit: The Auto Industry's Trade Pivot

Client Profile: A Global Automotive Leader

Industry: Automotive Manufacturing

Challenge: Inconsistent HTS classifications across plants led to duty leakage and compliance risk.

Solution: A "Classification-First" program to standardize data, recover duties, and protect margins.

The Challenge: Manufacturing Precision vs. Regulatory Chaos

Our client builds vehicles to tolerance levels measured in microns. Yet, their US trade compliance process lacked that same precision.

The company imports thousands of parts—many steel-heavy and exposed to volatile tariffs like Section 232. However, a forensic review revealed a costly disconnect:

• Inconsistent Data: Different plants and brokers used different HTS codes for the same part.

• Subjectivity: "Correct" classification often depended on which broker was on shift, not a standardized rule.

• Margin Leakage: Duty refunds and drawback opportunities were often missed because the data wasn't clean enough to support a claim.

The Financial Reality: When COGS (Cost of Goods Sold) is calculated using "best guess" duty rates, margins become unpredictable. GingerControl’s brief was to replace guesswork with a defensible, financial-grade trade program.

The Solution: A "Classification-First" Backbone

GingerControl and the client made a strategic pivot: Classification would come first. Instead of treating HTS codes as a last-minute filing detail, we established them as the financial backbone of every import decision.

1. Rationalizing the HTS Data

We didn't just scrub data; we built a defense. Over several months, the joint team:

• Reviewed 6,800+ SKUs: We mapped exactly how parts were designed, built, and sourced.

• Standardized the Playbook: We eliminated conflicting codes used by different brokers, creating a single "Truth Source" for US entries.

• Defined the Process: New parts are now classified before the first purchase order is cut, allowing Finance to calculate landed costs accurately.

2. From "Filing" to "Finance"

With the HTS backbone in place, we moved to Customs Entry Support and Duty Recovery. The goal was to give the finance team tools to control cash flow.

• Alignment: Commercial invoices and packing lists were aligned with the new HTS strategy, drastically reducing entry errors.

• Recovery: We identified high-value lanes where duty refunds and drawback could be structured as a recurring revenue stream, not a one-off project.

The Shift: Customs entries became predictable. Duty refunds became an output of a disciplined system rather than a frantic chase for paperwork.

The Results: 5% Reduction in Effective Duty

The transition from manual chaos to structural discipline delivered immediate financial results:

• Duty Savings: A 5% reduction in effective duty on targeted parts and programs through accurate classification and exclusion management.

• Operational Efficiency: 40% fewer post-entry corrections, saving hundreds of hours in administrative rework.

• Risk Mitigation: Plants saw fewer customs delays, protecting "Just-in-Time" production schedules.

More importantly, the program changed the culture. Trade compliance is no longer a "filing obligation"—it is discussed in finance meetings as a lever for margin protection.

Lessons for the Automotive Sector

For automotive CFOs, the lesson is clear: You cannot optimize what you cannot define.

Without a consistent HTS strategy, every sourcing decision and duty claim is built on sand. By integrating classification strategy, customs entry, and supplier risk into one program, GingerControl helped this client turn trade compliance into a competitive advantage.

The GingerControl Difference:

We respected the client's manufacturing reality. We didn't impose a generic model; we built a framework that speaks the languages of finance, engineering, and customs simultaneously. The result is a system that saves duties compliantly.