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

                                  May 17, 2023 - Average Age of Cars Rises Again
                                  • The latest analysis from S&P Global Mobility found the average age of cars and light trucks in operation on US roads has reached a new record in 2023 of 12.5 years, up by more than three months over 2022, according to Auto Remarketing. There are more than 284 million vehicles currently in operation in the US. Constrained new vehicle sales have put pressure on the average vehicle age. 2023 marks the sixth straight year of increase in the average vehicle age of the US fleet. S&P Global Mobility noted that the increased pace of growth for the average light vehicle age benefits the vehicle service industry. “An older fleet means vehicles will continue to need repair work and service to perform correctly,” analysts said. “The aftermarket sector trajectory typically follows growth in average vehicle age, as consumers invest more to keep their aging vehicles running, barring some exceptions.”
                                  • Wards Intelligence data shows that car dealerships sold nearly five times as many electric vehicles (EVs) in 2022 as they had in 2020, according to the National Automobile Dealers Association. The EV sales for 2023 to date are also looking strong. Sales in the first three months of 2023 grew by 60% compared to the same time last year. Demand for EVs has increased by 350% from 2020 to 2022, according to a recent analysis by Consumer Reports. Demand is expected to continue to rise as the cost of EVs falls, options increase, charging infrastructure improves, and more consumers have direct experiences with EVs.
                                  • US new car sales are expected to grow by 6% in the first quarter of 2023 year over year, as rising inventory levels are helping to meet pent-up demand, according to the Wall Street Journal. Manufacturers showing rising sales in the first quarter include GM (17.6% increase), Nissan Motor (17%), Hyundai (16%), and Honda Motor (6.8%). Inventory levels are finally recovering after supply chain issues put a dent in sales in 2022 when the auto industry experienced its worst annual performance in more than a decade. According to auto executives, supply problems have been easing, particularly on semiconductors, as factory production schedules become more stabilized. Wards Intelligence found that the available stock at dealerships and in transit was 1.85 million units at the end of March, up about 50% from the same period a year ago but still below the historical norm.
                                  • New car prices were down slightly in March 2023 month over month but up nearly 4% from a year ago, with the average transaction price (ATP) reaching $48,008, according to data from Kelley Blue Book (KBB). Luxury sales have been robust, and the luxury vehicle share hit 18% of total sales in March. A luxury car's average transaction price (ATP) was $65,202 in March, down slightly from February. Buyers have been paying above the average manufacturer's suggested retail price (MSRP) for 20 months, as low inventory factored into costs. However, the trend shifted in March 2023, when the average price paid by consumers fell to $171 below the average sticker. According to Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, "The latest transaction data from March reveals new-vehicle prices continued a downward trend through the first quarter of 2023. Both luxury and non-luxury prices were down month over month. We've been anticipating transaction price declines, as inventory has been steadily improving and choice has expanded. More vehicles on dealer lots – and on their competitors' lots – means dealers simply don't have the pricing power they did six months ago."
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