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 8,100 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 20-21 workers, and generates about $23-24 million annually.
- The auto parts distribution industry consists of about 8,100 companies that employ about 168,400 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
Mar 13, 2023 - Automotive Spending to Rise
- Consumers are expected to spend 11% more on automotive purchases in winter 2023 compared to winter 2022, according to the “KPMG Consumer Pulse Winter 2023” report in Chain Store Age. The report was based on a survey of 1,000 US consumers. The top reasons given by respondents for the increase include gas price increases (79%), driving more (28%), and toll increases (19%). According to KPMG consumer and retail leader Matt Kramer, “Our most recent consumer pulse survey showed consumers have largely better or equal pay, and are becoming fairly savvy at managing their household budget through shopping around, finding promotional discounts and deferring large purchases. Consumers will spend more in 2023 on essentials, particularly grocery, automotive and personal care, and also not miss out on events and experiences with select discretionary categories like travel and restaurants proving to be winners.”
- Sales of stick shifts are on the rise in 2023, accounting for 1.7% of new car sales compared to 1.2% in 2022 and 0.9% in 2021, according to data from JD Power in the Wall Street Journal. Car manufacturers are adding more models with stick shifts to their lineups to accommodate growing demand. Mini is adding four new manual models in March 2023. Acura added a manual option back to the Integra in 2022 after discontinuing stick shifts in its lineup in 2015. Of the five versions of the MX-5 Miata by Mazda Motor Corp., three are manual transmissions. The appeal for many younger drivers is that driving a clutch is more fun and runs counter to an increasingly automated world. Younger consumers accounted for more than half who bought manual Integras (between 18 and 46 years old) and a quarter of those who bought manual Miatas (between 18 and 35 years old).
- Tesla is working to lower car repair costs for consumers by providing needed parts and tweaking the car design, according to FenderBender. Tesla founder and CEO Elon Musk discussed during a recent earnings call that providing spare parts and making small changes in design can have an “enormous effect on the repair cost” of Tesla vehicles. According to the report, online data from salvage auction houses Copart and IAA found that most of the 120 totaled Model Y Tesla cars had fewer than 10,000 miles. The online data does not reveal the damage details of the totaled cars, but insurance companies often total a car if the repairs are too expensive. Analysis by Reuters showed that one Model Y Tesla vehicle listed by the IAA in January 2023 had a retail price of about $61,000 but had incurred a front collision with repairs estimated at $50,000.
- Auto sales in the US are forecast to fall nearly 8% in 2022 from 2021 and are down 20% from the market peak of 2016, according to Cox Automotive. Auto sales will finish near 13.9 million units, the lowest level since 2011 when the US was coming out of the Great Recession, per analysis by Cox of Kelley Blue Book sales estimates. General Motors ranked on top for sales in 2022, followed by Toyota. Affordability concerns for consumers and uneven vehicle supply hampered sales in 2022. According to Charles Chesbrough, senior economist at Cox Automotive, "Given the large improvement in supply levels, it seems likely that rising interest rates are now constraining demand in the retail auto market. With record-high prices and elevated loan rates, the pool of potential new-vehicle buyers is shrinking." New vehicle sales are projected to grow modestly in 2023 versus 2022, supported by increasing fleet volume.
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