Automotive Parts & Accessories Stores
Description
Companies in this industry operate physical retail establishments that sell new, used, and/or repaired automobile parts and accessories, as well as repair and install automotive accessories. Major companies include Advance Auto Parts, AutoZone, and The Pep Boys (all based in the US), as well as ATU (Germany); AUTOBACS SEVEN and Yellow Hat (both based in Japan); Halfords Group (UK); and Supercheap Auto (Australia).
The global automotive industry is expected to experience healthy growth over the next several years, due largely to economic expansion in emerging markets. The global light duty vehicles market is expected to grow to $1.4 trillion by 2030, according to Grand View research. The US, Germany, Mexico are the top auto part importing countries, according to the Observatory of Economic Complexity (OEC). Mature economies in North America and Europe will likely grow but at a much slower pace than emerging markets.
The US automobile parts retail industry includes about 38,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $57 billion.
The industry includes retailers of new and used automobile parts. Some large retailers also distribute auto parts. Tire wholesalers and tire dealers, which are not part of the industry, are covered in separate profiles.
COMPETITIVE LANDSCAPE
Demand for automobile parts is driven by the age and mileage of vehicles in use and generally increases when fewer new cars are sold and older cars are kept on the road longer. The profitability of individual companies depends largely on inventory management and marketing. Large companies have economies of scale in purchasing and distribution. Small companies can compete effectively by carrying specialized parts or providing extra services such as fast delivery. The US industry is concentrated: the 50 largest companies generate about 60% of industry revenue. The four largest companies account for about 50% of industry revenue.
Competitors include national, regional, and local auto parts chains, independently owned parts stores, online parts stores, wholesale distributors, jobbers, repair shops, car washes, and auto dealers, as well as mass merchandise stores, hardware stores, supermarkets, and convenience stores.
Autonomous vehicles (aka driverless cars) pose a potential long-term threat to auto parts retailers because they may drastically reduce the number of auto accidents: According to Nature, autonomous vehicles have a slightly lower rear-end accident rate of 39%, as compared to other vehicle types. Commercial customers, including auto repair shops, have become a significant source of sales for some auto parts stores. Amazon is a looming long-term threat to auto parts retail stores and to the industry's above-average margins.
PRODUCTS, OPERATIONS & TECHNOLOGY
Automotive parts and supplies account for about 35% of the industry sales. Other revenue sources for the industry include wholesale sales of automotive parts and accessories (roughly 10%) and plumbing, electrical, and HVAC supplies (less than 5%). Because products are used on vehicles after their original sale, the industry is considered part of the motor vehicle aftermarket. Products are sold to two main groups of customers. Do-it-yourself (DIY) customers are consumers who work on their own cars; do-it-for-me (DIFM) customers include commercial installers such as auto repair shops, gas stations, fleet operators, and car dealer service departments. Parts sellers who provide installation and repair services may also categorize customers of those services as DIFM.
Products include "hard parts" like brakes, mufflers, batteries, starters, alternator, and pumps; maintenance items like oil, oil filters, lubricants, additives, spark plugs, fuel injectors, lights, wipers, paints, waxes, and hoses; tools like wrenches and diagnostic equipment; and accessories like trim, wheel covers, and audio systems. While each store carries the same basic products, stores actively manage their hard parts inventory to match the makes and models of vehicles in their trade area.
Big retailers tend to operate their own distribution networks. Some retailers sell both to consumers and local repair shops; some retailers operate their own repair departments. Many retailers operate their own delivery trucks.
Supply and inventory management are crucial to retail operations. A retailer may carry 25,000 SKUs onsite in a 7,500 square foot store. Parts are bought from the large auto parts manufacturers, from thousands of smaller manufacturers that make parts for the auto companies under new vehicle programs, and from manufacturers that make replacement parts specifically for the aftermarket. Long-term supply contracts are rare, and in most cases, several suppliers are available for any particular product. Large repair assemblies like entire doors or fenders are usually available only from a single source or used parts suppliers.
The global automotive industry is expected to experience healthy growth over the next several years, due largely to economic expansion in emerging markets. The global light duty vehicles market is expected to grow to $1.4 trillion by 2030, according to Grand View research. The US, Germany, Mexico are the top auto part importing countries, according to the Observatory of Economic Complexity (OEC). Mature economies in North America and Europe will likely grow but at a much slower pace than emerging markets.
The US automobile parts retail industry includes about 38,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $57 billion.
The industry includes retailers of new and used automobile parts. Some large retailers also distribute auto parts. Tire wholesalers and tire dealers, which are not part of the industry, are covered in separate profiles.
COMPETITIVE LANDSCAPE
Demand for automobile parts is driven by the age and mileage of vehicles in use and generally increases when fewer new cars are sold and older cars are kept on the road longer. The profitability of individual companies depends largely on inventory management and marketing. Large companies have economies of scale in purchasing and distribution. Small companies can compete effectively by carrying specialized parts or providing extra services such as fast delivery. The US industry is concentrated: the 50 largest companies generate about 60% of industry revenue. The four largest companies account for about 50% of industry revenue.
Competitors include national, regional, and local auto parts chains, independently owned parts stores, online parts stores, wholesale distributors, jobbers, repair shops, car washes, and auto dealers, as well as mass merchandise stores, hardware stores, supermarkets, and convenience stores.
Autonomous vehicles (aka driverless cars) pose a potential long-term threat to auto parts retailers because they may drastically reduce the number of auto accidents: According to Nature, autonomous vehicles have a slightly lower rear-end accident rate of 39%, as compared to other vehicle types. Commercial customers, including auto repair shops, have become a significant source of sales for some auto parts stores. Amazon is a looming long-term threat to auto parts retail stores and to the industry's above-average margins.
PRODUCTS, OPERATIONS & TECHNOLOGY
Automotive parts and supplies account for about 35% of the industry sales. Other revenue sources for the industry include wholesale sales of automotive parts and accessories (roughly 10%) and plumbing, electrical, and HVAC supplies (less than 5%). Because products are used on vehicles after their original sale, the industry is considered part of the motor vehicle aftermarket. Products are sold to two main groups of customers. Do-it-yourself (DIY) customers are consumers who work on their own cars; do-it-for-me (DIFM) customers include commercial installers such as auto repair shops, gas stations, fleet operators, and car dealer service departments. Parts sellers who provide installation and repair services may also categorize customers of those services as DIFM.
Products include "hard parts" like brakes, mufflers, batteries, starters, alternator, and pumps; maintenance items like oil, oil filters, lubricants, additives, spark plugs, fuel injectors, lights, wipers, paints, waxes, and hoses; tools like wrenches and diagnostic equipment; and accessories like trim, wheel covers, and audio systems. While each store carries the same basic products, stores actively manage their hard parts inventory to match the makes and models of vehicles in their trade area.
Big retailers tend to operate their own distribution networks. Some retailers sell both to consumers and local repair shops; some retailers operate their own repair departments. Many retailers operate their own delivery trucks.
Supply and inventory management are crucial to retail operations. A retailer may carry 25,000 SKUs onsite in a 7,500 square foot store. Parts are bought from the large auto parts manufacturers, from thousands of smaller manufacturers that make parts for the auto companies under new vehicle programs, and from manufacturers that make replacement parts specifically for the aftermarket. Long-term supply contracts are rare, and in most cases, several suppliers are available for any particular product. Large repair assemblies like entire doors or fenders are usually available only from a single source or used parts suppliers.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
Search Inside Report
Pricing
Currency Rates
Questions or Comments?
Our team has the ability to search within reports to verify it suits your needs. We can also help maximize your budget by finding sections of reports you can purchase.
