Used Motor Vehicle Parts Wholesalers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,400 used motor vehicle parts wholesalers in the US purchase used and damaged vehicles, dismantle them, and resell the related parts. Major revenue categories include used automotive parts, accessories, and equipment; and new and rebuilt automotive parts and supplies. Firms may also offer generic auto parts and supplies, refurbished parts, or warranties. Some companies offer related services, such as towing or repair.
Uneven Supply
Supply of salvaged vehicles varies over time and firms face increasing competition for vehicles from overseas buyers.
Dependence On Auto Industry And Driving Trends
The used motor vehicle parts industry is dependent on vehicle accidents and mechanical failures to both drive demand for replacement parts and provide a source of supply for recycled and refurbished parts.
Industry size & Structure
The average used motor vehicle parts wholesaler operates out of a single location, employs 15 workers, and generates $3-4 million annually.
- The used motor vehicle part wholesale industry consists of 1,400 firms that employ about 20,600 workers and generate about $5.4 billion annually.
- The industry is somewhat fragmented; the top 50 companies account for 64% of industry revenue.
- Large companies with auto salvage operations include LKQ and Schnitzer Steel (doing business as Radius Recycling).
- While some large companies have operations in foreign countries, Internet trading allows firms of all sizes to buy and sell used motor vehicles for parts from almost any location.
Industry Forecast
Used Motor Vehicle Parts Wholesalers Industry Growth
Recent Developments
Nov 21, 2024 - Wholesale Sector Expands
- Economic activity in the services sector including the wholesale sector expanded in October 2024, according to the Services ISM Report on Business. The Services PMI registered 56% in October, up 1.1 percentage points from September, marking the fourth consecutive month of expansion. Fourteen of the 18 services industries reported growth in October including Retail Trade; Information; Transportation & Warehousing; Accommodation & Food Services; Finance & Insurance; Construction; Mining; Public Administration; Utilities; Real Estate, Rental & Leasing; Educational Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Wholesale Trade. Fifteen of the 18 services industries reported an increase in prices paid for materials and services during the month of October, including the Retail Trade and Wholesale Trade industries. Sales for motor vehicles and parts wholesalers rose 10.9% in July 2024 compared to a year ago and were up 0.5% from the previous month, according to the US Census Bureau. Inventories for motor vehicles and parts wholesalers were up 11.9% in July 2024 compared to a year ago and increased 0.9% from the previous month.
- Some auto parts retailers and suppliers are ready to increase prices to offset new tariffs proposed by president-elect Donald Trump. One large auto parts retailer has a plan in place to manage the looming tariff plans, which include 10-20% tariffs on all foreign goods imported into the US and up to 60% tariffs on goods from China. according to CBS News. AutoZone CEO Philip Daniele said in a recent earnings call that the company will pass tariff costs back to the consumer. The company currently has major suppliers based in China, India, and Germany. According to the report, any new tariffs may take up to a year to pass through the government so impacts may not be felt until 2026. Some companies are shifting their supply sources to regions that would be less impacted by potential tariffs. Potential higher prices for auto parts under the new administration may lead to greater demand for more economical used motor vehicle parts.
- Carvana is expanding its auction operations at its “Megasite” ADESA wholesale auction facility in Houston, adding inspection and reconditioning center capabilities, according to a recent report in Auto Remarketing. The online used-car retailer said the new services will expand reconditioning capacity and network efficiencies, improve delivery times for local retail customers, and provide more robust auction offerings for local commercial customers. The Houston site is 43 acres and has more than 5,000 parking spaces. Carvana announced a similar expansion to its Megasite ADESA location in Kansas City in August 2024. Carvana acquired wholesale auction firm ADESA in 2022. Used motor vehicle parts wholesalers purchase salvage vehicles at auctions.
- The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings grew in October 2024, with a seasonally adjusted 35% of small business owners reporting jobs they could not fill. The reading is up one point from September 2024. A seasonally adjusted net 15% of small business owners plan to create new jobs over the next three months, unchanged from September. About 20% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “On Main Street, the job market remains challenging. Although the labor market appears to be softening overall, small business owners reported little success filling their plentiful vacancies in October.”
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