Used Motor Vehicle Parts Wholesalers

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 1,400 used motor vehicle parts wholesalers in the US purchase used and damaged vehicles, dismantle them, and resell the related parts. Major revenue categories include used automotive parts, accessories, and equipment; and new and rebuilt automotive parts and supplies. Firms may also offer generic auto parts and supplies, refurbished parts, or warranties. Some companies offer related services, such as towing or repair.

Uneven Supply

Supply of salvaged vehicles varies over time and firms face increasing competition for vehicles from overseas buyers.

Dependence On Auto Industry And Driving Trends

The used motor vehicle parts industry is dependent on vehicle accidents and mechanical failures to both drive demand for replacement parts and provide a source of supply for recycled and refurbished parts.

Industry size & Structure

The average used motor vehicle parts wholesaler operates out of a single location, employs 15 workers, and generates $3-4 million annually.

    • The used motor vehicle part wholesale industry consists of 1,400 firms that employ about 20,600 workers and generate about $5.4 billion annually.
    • The industry is somewhat fragmented; the top 50 companies account for 64% of industry revenue.
    • Large companies with auto salvage operations include LKQ and Schnitzer Steel (doing business as Radius Recycling).
    • While some large companies have operations in foreign countries, Internet trading allows firms of all sizes to buy and sell used motor vehicles for parts from almost any location.
                                  Industry Forecast
                                  Used Motor Vehicle Parts Wholesalers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  May 20, 2024 - Wholesale Used Vehicle Prices Fall
                                  • Wholesale used vehicle prices fell 13.1% in February 2024 compared to a year ago, according to Manheim Consulting. All major segments experienced price decreases, including compact cars (-16.5%), midsize cars (-15.1%), EVs (-15%), pickups (-14.3%), and SUV/CUVs (-12.8%). In addition, sales for motor vehicles and parts wholesalers grew 2.3% in March 2024 compared to a year ago and were 7.3% higher than the previous month, according to data from the Census Bureau.
                                  • The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings were up in April 2024, with a seasonally adjusted 40% of business owners reporting jobs they could not fill. The reading is up three points from March 2024, which had the lowest reading since January 2021. A seasonally adjusted net 12% of small business owners plan to create new jobs over the next three months, up one point since March. About 19% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “Hiring plans among small businesses once again in April, but open positions remain largely unfilled as owners struggle month after month to find employees. Overall, small businesses are not reporting net gains in employment as wage pressures and inflation keep the labor market tight.”
                                  • According to the Institute for Supply Management, the ISM Services PMI showed overall growth in February 2024, marking the 14th consecutive month that the index remained above the baseline for growth. The index registered 52.6%, slightly lower than the January reading of 53.4%. Any reading above 50% continues to indicate sustained growth. The report tracked the performance of 18 service sectors, out of which 14 showed gains in February. These sectors include Construction; Retail Trade; Public Administration; Health Care & Social Assistance; Accommodation & Food Services; Utilities; Professional, Scientific & Technical Services; Management of Companies & Support Services; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Information; Educational Services; and Transportation & Warehousing. Three sectors reported a decrease in February: Arts, Entertainment & Recreation; Mining; and Real Estate, Rental & Leasing. The Services PMI report is based on data from purchasing and supply executives nationwide.
                                  • According to the US Department of Transportation’s Federal Highway Administration, the total number of vehicle miles traveled in the US was up 0.7% in March 2024 compared to the same period a year ago. The estimated number of miles traveled during the month was 275.5 billion vehicle miles. Most regions of the US experienced a slight increase in vehicle miles in March 2024, except the South-Atlantic, which saw a decrease of 0.7% in total travel miles year over year. Meanwhile, the North-East region saw an increase of 1.3% in total estimated vehicle miles in March year over year, the North-Central saw an increase of 1.3%, the West saw an increase of 1.3%, and the South-Gulf was up 0.5%. For 2024 year to date, miles traveled increased by 0.6% over the same period in 2023.
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