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 fewer than 10 workers, and generates $3-4 million annually.

    • The used motor vehicle part wholesale industry consists of 1,400 firms that employ about 20,700 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.
    • 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

                                  Nov 13, 2023 - Slower Growth Expected for Industry
                                  • Lower consumer spending, lingering supply issues, and inflation are expected to limit growth in the used motor vehicle parts wholesalers industry, which is projected to grow at an over 3% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The forecast follows several years of sales volatility during the pandemic in 2020 (4.8%), 2021 (35.5%), and 2022 (2.2%).
                                  • The vehicle wholesale market is expected to return to its typical activity, following tentative contract agreements between US auto workers and car manufacturers, according to a Black Book Market Insights report in Auto Remarketing. The United Auto Workers (UAW) union recently reached tentative agreements with General Motors, Ford, and Stellantis. The deals, which are in the process of being ratified by union members, could end a “stand-up” strike method targeting specific plants that began in mid-September. Workers are expected to return to work during the ratification process. The agreements are expected to improve wages and job security protections for union workers. The union represents nearly 150,000 autoworkers, and 46,000 employees went on strike at the peak of the strike.
                                  • Labor quality and inflation were tied as the top business problems for small business owners, each called out by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell half of a point in September 2023 to 90.8, marking the 21st consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy. Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.” Small business owners are still encountering historically high job opening levels, with a seasonally adjusted 43% of owners reporting job openings they could not fill in the current period. Nearly 60% of owners reported making capital outlays in the past six months, with 41% spending on new equipment, 22% acquiring vehicles, and 17% improving or expanding facilities.
                                  • The US used vehicle supply dropped in August on stronger sales, with the days’ supply down 15% year over year and four days shorter than July, according to Cox Automotive data in Auto Dealer Today magazine. The beginning of September began with a 44 days’ supply, compared to 48 at the start of August. Used inventory nationwide fell 9% year over year, totaling 2.25 million unsold used vehicles. According to Cox Senior Manager of Economic and Industry Insights Chris Frey, “Used-vehicle inventory had been increasing after hitting a low point in March. But that increase in inventory stalled in the middle of July and into August as sales unexpectedly picked up.” Wholesale prices declined 8% year over year, though increased 0.2% month over month. Nonluxury auto manufacturers with the lowest supply of used vehicles were Honda, Hyundai, Nissan, Subaru, and Toyota.
                                  Get A Demo

                                  Vertical IQ’s Industry Intelligence Platform

                                  See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                  Build valuable, lasting relationships by having smarter conversations -
                                  check out Vertical IQ today.

                                  Request A Demo