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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jul 15, 2024 - Inflation Falls, Employment Up
                                  • Producer inflation for auto parts distributors fell by 3.8% in May 2024 compared to a year ago, following year-over-year increases for the first four months of the year, according to producer price data from the US Bureau of Labor Statistics (BLS). Producer prices were also down slightly in May 2024 compared to April 2024. Auto parts distributors industry employment increased during the first five months of 2024 year over year except for a slight downturn in February. Average wages for nonsupervisory employees in the industry grew during the first five months of 2024 year over year, reaching an average of $26.19 per hour in May 2024, per the BLS.
                                  • US light duty aftermarket sales grew by 8.6% in 2023, reaching $392 billion, according to the 2025 Auto Care Factbook released by the Auto Care Association. The sales surpassed the previous year’s projections of 8.1% despite challenges such as persistent inflation. Light vehicle growth is expected to be 5.9% higher in 2024. The industry is expected to continue to improve, with a sales forecast of $617.3 billion in 2027 for total light, medium, and heavy duty automotive aftermarket. Consumers seeking affordable options for service and repair to keep their cars running are driving stable growth in the industry. According to Bill Hanvey, president and CEO, Auto Care Association, “As credit card debt in the U.S. reaches an all-time high of more than $17 trillion in 2024, Americans are feeling the weight of inflation and choosing more cost-saving options when possible, including with the maintenance of their cars.”
                                  • Auto parts suppliers will receive $100 million in new grants from the US Department of Energy (DOE) to help small and medium-sized manufacturers convert facilities to electric parts supply and improve the sustainability of facilities, according to the Detroit News. The grants aim to improve the flow of EV parts made by US companies into the supply chain. Of the new funds, $50 million from the DOE’s Automotive Conversion Grant program will support small and medium-sized suppliers retooling from manufacturing parts for internal combustion engine vehicles to manufacturing parts for the EV supply chain. The DOE’s Implementation Grants Program will apply $50 million to assist auto suppliers upgrade their facilities to improve “energy and material efficiency, cybersecurity, or productivity, or reduce the greenhouse gas emissions,” per the White House press release. Funding for the grants comes from the Inflation Reduction Act and the Bipartisan Infrastructure Law, respectively.
                                  • US manufacturing activity contracted in June 2024 for the third consecutive month after a brief expansion in March, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 48.5% in June, down 0.2 percentage points from the 48.7% recorded in May. A reading above 50% indicates manufacturing expansion. Prior to the uptick in March, US manufacturing activity had fallen below the baseline for growth for 16 consecutive months. June’s New Orders Index was in the contraction zone at 49.3%. The June Production Index was 48.5%, a decrease from May’s 50.2%. Eight manufacturing industries tracked by the ISM reported growth in June: Printing & Related Support Activities; Petroleum & Coal Products; Primary Metals; Furniture & Related Products; Paper Products; Chemical Products; Miscellaneous Manufacturing; and Nonmetallic Mineral Products. The industries reporting contraction in June were Textile Mills; Machinery; Fabricated Metal Products; Wood Products; Transportation Equipment; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; and Computer & Electronic Products.
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