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 7,700 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 7,700 companies that employ about 175,700 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 7, 2024 - Producer Prices, Wages Up
- According to the Bureau of Labor Statistics (BLS), producer prices for auto parts distributors continue to grow at a fast pace, up 11% from 2022 to 2023 and 51% from 2019 to 2023. Wages have also increased significantly in a tight labor market in recent years. Average hourly wages reached $26 an hour in Q4 2023, which is a 6% increase from 2022 and 31% increase from 2019. In comparison, employment levels have grown at a slower pace, staying mostly flat in 2023 from 2022, per the BLS.
- According to the annual Warehouse/DC Outlook survey in Modern Materials Handling, more organizations are adopting a “wait and see” approach toward spending plans due to the current economic uncertainty. In 2024, 46% of respondents are taking a “wait and see” approach, up from 34% in 2023. The survey was conducted among managers and personnel involved in purchasing decisions for material handling solutions companies. For those planning to invest, 67% are interested in materials handling equipment, 55% in automation and related technologies, and 50% in storage equipment. The report highlighted bright spots for the industry, including stronger interest in labor management systems (LMS), increased interest in goods-to-person robotics, attention to maintenance services, and the use of advanced analytics to draw value from existing systems.
- Hybrid market share is expected to grow in 2024 as consumers continue to see hybrids as a comfortable choice in a transition away from internal combustion engine (ICE) vehicles, according to Edmunds’ “2024 Predictions” report in Repairer Driven News. The hybrid market share reached nearly 10% in November 2023, an increase of 99% year-over-year compared to the previous year’s 4.9% share. Hybrid vehicles are outpacing EV demand, as EV market share grew by 25% during the same period. According to Ivan Drury, director of insights at Edmunds, “Sales are taking off for the humble hybrid. You’d be hard-pressed to find a hybrid—they’re almost all sold out. They’re vehicles for people who want to live their life with more benefit and less complexity.” Shifts in consumer vehicle preferences affect demand for selected auto parts.
- US manufacturing activity contracted in February 2024, falling below the baseline for growth for the sixteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.8% in February, down 1.3 percentage points from the 49.1% recorded in January. A reading above 50% indicates manufacturing expansion. February’s New Orders Index was in the contraction zone at 40.2%. The February Production Index was 48.4%, a decrease from January’s 50.4%. Eight manufacturing industries tracked by the ISM reported growth in February: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment. The industries reporting contraction in February were Furniture & Related Products; Machinery; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; and Electrical Equipment, Appliances & Components.
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