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
Apr 3, 2025 - Auto Imports Hit With 25% Tariff
- The Trump administration slapped 25% tariffs on all imported automobiles on April 2, claiming the levies will spur auto factory building in the US. The tariffs will apply to all imported passenger cars and light trucks. Certain auto parts will also be subjected to the levies such as engines, electrical components, and powertrain parts. This is in addition to reciprocal tariffs Trump also levied against specific countries that are key US partners in auto manufacturing. According to Cox Automotive, the tariffs will increase the price of imported passenger vehicles by an average of $6,000. In 2023, the US imported about $120 billion worth of automotive products from Mexico and Canada - roughly half of all US vehicle and parts imports. The move will likely spur retaliatory tariffs from other countries against the US, potentially driving auto prices even higher.
- Struggling retailer Advanced Auto Parts is aggressively moving on a corporate restructuring in early 2025 to turn around years of floundering sales and ranking fourth among its competitors. Its closing of 700 corporate-owned and independent stores represents 10% of corporate locations and 20% of indies. It is also closing four distribution centers and simplifying its supply chain from big distribution hubs to smaller regional hubs in order to get the vast amount of parts the company must carry to customers as quickly as possible. With recession worries looming, auto parts retailers typically benefit from consumers putting off new car purchases in favor of repairing a current vehicle. But the trade war between the US and its North American neighbors is a wild card that could increase costs and blunt any gain to be had in the auto parts industry.
- 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.
- 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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