-
Welcome to Auto Parts Forum
Whether you are a veteran automotive parts guru or just someone looking for some quick auto parts advice, register today and start a new topic in our forum. Registration is free and you can even sign up with social network platforms such as Facebook, Twitter, Google, and LinkedIn.
APA’s Steve Tucker: ‘We See Demand Continuing To Be Strong’
-
Similar Topics
-
By Counterman
In link hidden, please login to view, we gave leaders from the major distribution groups and trade associations an opportunity to reflect on the most critical issues affecting the automotive aftermarket. For the second year in a row, we let distribution leaders “riff” on these topics in their own words.
Here’s what Steve Tucker, president of Automotive Parts Associates, had to say on the topic of consolidation in the aftermarket.
The consolidation of the aftermarket has been a conversation for so many years now that it almost seems unnecessary to discuss further. Far too many see the independent WD as just “hanging on” and perhaps even as a relic of bygone years. Those of us who live in this space every day know different!
There is no question that there are fewer individually owned and independent warehouse distributors out there. There are still hundreds out there, however, that not only continue to survive but are thriving. The strengths of the players in the independent space are often difficult for the big-box guys to replicate. These business owners operate very close to the street and can quickly adjust to changing market conditions, see trends and act accordingly.
Servicing the customer and handling issues quickly continue to be the primary drivers, and our companies excel in those areas without question. Having true professionals with extensive parts knowledge working with our customers is a key differentiator for us. While we all do substantial business online with our customers, there is no substitute for personal attention especially when an issue needs timely resolution.
Additionally, our companies continue to see value in supporting name brands. As vehicle complexity continues to mount, technician customers are looking for brands they trust to ensure the repair is done right, and so the independent aftermarket continues to support our customers with manufacturer brands whenever possible.
Another aspect of the business that has been growing at an ever-increasing rate is the availability of good data and tools to mine and use that data to tailor inventories, maximize space, control deliveries, and improve virtually every aspect of the business models. I feel strongly that this is a key area that all the program groups invested in to provide those tools to our memberships in an easy-to-use concise toolbox. Data is king, and knowing how to take that data and use it to maximize the rest of our capabilities is critical for success and growth.
We can then tie this all together with a strong and responsive industry association that all of us need to support as they look out for us at a national level not only with legislative issues, but also by providing support with environmental initiatives, economic information, and best practices support. Our Auto Care Association is one of the best ways we can all ensure our future and the future of those that follow us in the independent aftermarket. I think for most of us this isn’t just a career, it is truly a lifestyle, and we need to work with Auto Care to leave this business in a great place for the next generation.
I look at other businesses such as pharmacies, retail, hardware, etc., and while the big-box guys have certainly impacted there as well, I still see a big number of independent businesses operating there as well and they do so based on the same “blocking and tackling” mentality we use. Service the customer! As a parting thought, and if you haven’t done so, I recommend you watch the Tom Hanks movie “A Man Called Otto.” In one of the opening scenes, he is attempting to buy a 5-foot length of rope in a hardware store and the cashier cannot sell him rope by the foot because the system only sells in yard increments. Our folks would’ve figured it out!
The post
link hidden, please login to view appeared first on link hidden, please login to view.
link hidden, please login to view -
By Counterman
Second-quarter U.S. sales of new cars and trucks will post a year-over-year increase, according to an Edmunds forecast.
The firm is forecasting second-quarter sales of more than 4 million new cars and trucks. That’s up 16.1% compared to second-quarter 2022 and up 13.8% compared to first-quarter 2023, according to
link hidden, please login to view. “If you look at Q2 in the aggregate, new-vehicle sales appeared to settle into a stable groove, which is a nice departure from the tumult that the industry has witnessed over the last few years,” said Ivan Drury, Edmunds’ director of insights. “More consumers returned to the market with older trade-ins, which indicates that pent-up demand helped buoy sales. But digging a bit deeper into the data, June tells a slightly conflicting story. After five consecutive months of increasing discounts and vehicles sitting on dealer lots for longer periods of time, June shows that those trends are stalling a bit.”
Edmunds data reveals that the average age of vehicles traded in toward new-car purchases increased in Q2 2023, climbing to 5.6 years, compared to 5.2 years in Q2 2022 and 6.1 years for Q2 2019. Edmunds analysts note that inventory also has continued to slowly improve but isn’t close to returning to pre-pandemic levels – which is keeping prices elevated.
“This road to recovery for the industry has been a winding one,” Drury explained. “With many automakers committing to better aligning production and demand, we might be on the cusp of seeing what a new normal sales pace looks like compared to the pre-pandemic years, when bloated inventories and deep discounts shaped the industry. Automakers and dealers are well-prepared to pivot amid shifting market dynamics, but this isn’t the best news for consumers hoping for more generous deals heading into the Fourth of July weekend. A return of summer sales banners, waving inflatables and tent events are more likely to be an exercise in advertising over the next few months than desperation to move the metal.”
Edmunds analysts advise consumers to approach car shopping with a pragmatic mindset even if they encounter sales messaging or promotions this summer, because interest rates are expected to stay elevated and discounts likely will be limited.
“If holding off on a car purchase is no longer possible this summer, it’s time to seriously evaluate your list of must-haves versus nice-to-haves,” said Drury. “Are you really planning on using that third row? Do you really need those extra bells and whistles? Because any of those upgrades are likely going to cost you far more than you might expect.”
The post
link hidden, please login to view appeared first on link hidden, please login to view.
link hidden, please login to view -
By Counterman
In our cover story for
link hidden, please login to view, we asked distribution leaders to reflect on the successes and challenges of 2022 and share some of their insights for the industry in 2023. Here’s our Q&A with Steve Tucker, president of Automotive Parts Associates (APA).
AMN/CM: What did your organization accomplish in 2022 that you are most proud of?
ST: I am so proud of our team here at APA/TruStar headquarters as well as our shareholders and members. The acquisition of TruStar at the beginning of 2022 not only significantly increased our membership but also opened the door to access additional product categories for all APA/TruStar distributors and increased our footprint to better access national account opportunities. Probably just as big for us is the increase in investments we have made in technology. Providing our distributors with easy access to data that is tailored to their market area is absolutely key in being able to structure inventories to best serve our customers. The adoption rate of these new tools has exceeded my expectation, and I know this will continue to be a big part of the services we provide. Finally, we have grown APA by recruiting distributors who may have not currently been part of a group and see the value of joining APA, and also by recognizing the opportunities bringing those members into APA provides to not only recruit but to our existing shareholders. Bringing non-direct purchases back into the group makes us all stronger not only for the group itself, but it also makes us more valuable to our supplier partners as well. Life is good here at APA!
AMN/CM: How can the independent aftermarket parts and service segments best prepare to repair the car of tomorrow as ADAS, EVs and other technologies become more prominent?
ST: This has become a “go-to” topic just about any time we gather. Aside from getting better access to the information we need to effectively make repairs, I just don’t see a major problem. The amount of parts and repairs actually involving the current internal combustion powerplant in today’s vehicle is minimal compared to repairs being performed on the remainder of the vehicle systems. The chassis and braking systems on EVs and ICE vehicles are very similar, and parts availability for EVs is rapidly improving, so I am quite optimistic we will be able to adequately service these vehicles just as we do with today’s ICE-powered platforms. The other technologies such as ADAS, LiDAR, etc., are being repaired to some degree today and as vehicles with those technologies become an even bigger piece of the car parc, I believe our customers will embrace the repair opportunities just as they have with other new technologies. One can argue that repair frequency for EVs and emerging technologies will be less than what we currently see. However, I think the types of repairs will be more “high-tech,” and as such the repair dollars associated with the change should improve in both parts and labor segments. As an industry, we need to remain agile. We must be prepared to support EVs and vehicles that are dependent on ADAS, while at the same time providing parts and service to older vehicles. Our professional customers should be able to rely on us to keep them abreast of trends, tools and the training necessary as they continue to service a wide range of vehicles. We’ll be making this a top priority, especially as the electrification and ADAS categories continue to become major growth contributors. I would also mention this increases the importance of Right to Repair for our industry. As systems become more complex, we need to ensure that professional shops have access to critical data that helps repair vehicles. We will continue to advocate for Right to Repair with industry partners.
AMN/CM: What do you feel is the greatest threat facing the automotive aftermarket right now?
ST: I strongly believe that threats are just opportunities you haven’t yet mastered. Getting access to information from the OEMs that will allow our technician customers to keep doing what they do is one of the biggest threat/opportunities we face today in my opinion. Another major issue is not peculiar to our industry and that is one of finding and retaining employees. From the repair facility through the distribution chain and to our supplier partners we are all facing the same challenges on this issue. For a lot of us this industry has been more of a lifestyle than just a career, and we need to pass this passion on to those standard bearers of the future.
The post
link hidden, please login to view appeared first on link hidden, please login to view.
link hidden, please login to view -
-
By Counterman
Genuine Parts Co. (GPC), parent company of NAPA Auto Parts, reported record third-quarter sales of $5.7 billion, a 17.8% year-over-year increase.
The sales growth reflects a 12.7% increase in comparable sales and a 9.1% benefit from acquisitions, according to the company.
“The GPC team delivered record results, with double-digit sales and earnings growth driven by the execution of effective strategies and continued resilience of our Automotive and Industrial businesses,” said Paul Donahue, chairman and CEO. “We are pleased with the continued strength of our results for 2022 and are proud of the great work by all our 53,000 teammates who are at the core of our success.”
Sales for the Automotive Parts Group were $3.5 billion, up 8.9% year-over-year. Industrial sales were $2.2 billion, up 35.3% from the same period in 2021, and reflecting a 19.6% increase in comparable sales and a 16.6% contribution from the acquisition of Kaman Distribution Group.
“Our third-quarter results were driven by sound industry fundamentals and execution of our key strategic initiatives to deliver accelerated sales growth and margin expansion in both segments,” said Will Stengel, president. “We were also pleased to further strengthen our balance sheet and generate continued strong cash flow.
“The solid growth in Automotive was broad-based, with double-digit total sales growth in local currency in each of our global operations. Likewise, the continued strength in Industrial led to its sixth consecutive quarter of double-digit sales comps.”
GPC revised its sales guidance for full-year 2022. The company said it now expects overall sales to grow between 15% and 16% year-over-year. The previous guidance was for sales growth between 12% and 14%.
The post
link hidden, please login to view appeared first on link hidden, please login to view.
link hidden, please login to view
-
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.