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 (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

                                  Mar 18, 2024 - ISM Services Index Shows Expansion
                                  • 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 remained mostly unchanged in January 2024 compared to the same period a year ago. The estimated number of miles traveled during the month was 247.1 billion vehicle miles. Most regions of the US experienced a decline in vehicle miles in January 2024, except the West, which saw a rise of 2.7% in total travel miles year over year. Meanwhile, the South-Gulf region saw a decrease of 3.2% in total estimated vehicle miles in January year over year, the North-Central saw a decline of 2%, the South-Atlantic saw a decrease of 1.2%, and the North East remained flat. For 2023, miles traveled increased by 2.1% over 2022.
                                  • The US used vehicle supply was lower in February on stronger sales, with the days’ supply down 20% month over month and 2% higher year over year, according to a Cox Automotive analysis of vAuto Live Market View data. The beginning of February began with a 44 days’ supply, lower than the 53 days in the previous month and the lowest level since October 2023. Used inventory volume nationwide rose 9% month over month, totaling 2.27 million unsold used vehicles. Wholesale used vehicle prices declined 13% in February year over year and 0.1% month over month, according to the Manheim Used Vehicle Value Index.
                                  • Used motor vehicle parts wholesalers will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
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