Auto Parts Distributors
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 7,600 auto parts distributors in the US generate revenue by selling automotive parts, supplies, equipment, tools, and accessories to retailers and auto service providers. In general, auto parts distribution involves warehouse distributors (WD), jobbers, and retailers. Large WDs purchase and stock large quantities of parts and supplies from manufacturers and distribute them to jobbers. Jobbers purchase smaller quantities from WDs and sell them to retailers/dealers, repair shops, body shops, and dealership parts departments.
Complex, Long-Lasting Parts
Advances in technology have increased the quality, complexity, and average useful life of automotive parts.
Significant Investment in Inventory
As a result of new product proliferation in the auto industry, warehouse distributors (WD) stock hundreds of thousands of parts, components, and accessories to service the ever growing number of different brands and models.
Industry size & Structure
The average auto parts distributor operates out of a single location, employs fewer than 20 workers, and generates about $25 million annually.
- The auto parts distribution industry consists of about 7,600 companies that employ about 183,600 workers and generate about $192 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 61% of sales. Many companies are small independent operators.
- Large companies include Hahn Automotive Warehouse and Keystone Automotive.
- Some large auto parts distributors have extensive retail operations.
Industry Forecast
Auto Parts Distributors Industry Growth
Recent Developments
Jan 20, 2025 - Increase in Industry Inventories
- Inventories and the inventory/sales ratio for motor vehicles and parts wholesalers rose 4.1% and 1.7% in November, respectively, year over year, per the Census Bureau. Sales for motor vehicles and parts wholesalers increased 2.3% in November 2024 year over year but fell 7.3% from the previous month, according to the Census Bureau. Producer inflation for auto parts distributors grew 4.7% in November 2024 compared to a year ago, according to the Bureau of Labor Statistics (BLS). Auto parts distributors industry employment increased 0.8% in October 2024 compared to a year ago. Average wages for nonsupervisory employees in the industry grew 9.6% in October 2024, reaching $27.67 per hour, per the BLS.
- The auto parts landscape will shift in 2025 when major automotive parts retailer Advance Auto Parts closes 500 corporate stores and 200 independently owned locations, as part of a restructuring plan, according to a report in Vehicle Service Pros. The company, which currently operates over 4,700 stores, expects the locations to be closed by mid-2025. As part of the strategic changes, the company also sold its automotive parts wholesaler unit Worldpac to investment firm Carlyle in late 2024 for a transaction value of $1.5 billion. According to President and CEO Shane O’Kelly, “The completion of the Worldpac transaction is a pivotal moment in the simplification of our business model.”
- 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. Per Daniele, "We'll generally raise prices ahead of — we know what the tariffs will be — we generally raise prices ahead of that." 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.
- Consumers pre-ordering build-to-order (BTO) vehicles in North America direct from OEMs continued to grow in 2023, though slower than expected, according to new survey data by Cox Automotive in Wards Auto. According to the survey of 1,932 consumers in February, 221 consumers bought from legacy OEMs such as Ford, and 46 bought from start-ups such as Rivian and Tesla in the previous 12 months. That equated to 14% of new build-to-order vehicle buyers in 2023, compared to 17% in 2022 and 9% in 2021. According to Sean Tucker, a senior editor at Cox's Autotrader and Kelley Blue Book, "We'll see more 'build-to-order' over time, but I think it's taking a lot longer than most people thought, especially during the pandemic." The report also showed that nearly three-quarters of build-to-order and dealer buyers were happy with their purchase. US start-up Lucid Motors offers consumers choices online for color, appearance, and extras such as heated seats, sound systems, and driver-assistance systems with transparent pricing. Offering customers additional customization options may help automakers charge more for extra accessories.
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