O’Reilly Building Distribution Center In Mexico

[Counterman]

O’Reilly Automotive has begun construction of its first distribution center in Mexico, company executives announced.

The company’s first “O’Reilly-prototype” DC, located in Guadalajara, will boast a footprint of approximately 370,000 square feet, according to O’Reilly COO Brad Beckham.

Beckham noted that O’Reilly is “targeting a completion date of the first half of 2023.”

“This new facility will have the ability to provide company-store and jobber distribution to the Guadalajara metro area and support growth in the surrounding region,” Beckham explained during the company’s April 28 conference call. “Our distribution teams are well-seasoned in the design, planning and construction of new facilities, and we have been very pleased with our progress in working with our leadership team in Mexico to get this project rolling in true O’Reilly fashion.”

Company leaders “continue to be excited about the growth opportunities we see in the Mexican automotive aftermarket,” Beckham added.

In late 2019, O’Reilly acquired Guadalajara-based Mayasa Auto Parts, the company’s first foray into the Mexican aftermarket. At the time of the acquisition, Maya operated five distribution centers supporting 20 Orma Autopartes stores and more than 2,000 independent jobbers throughout Mexico.

O’Reilly CEO Greg Johnson said the company’s strategy in Mexico mirrors its strategy in the United States, and company leaders are “happy with our progress in Mexico.”

“We want to make sure we’ve got the supply chain infrastructure in place before we really ramp up our store growth at a more aggressive pace, because we want that customer experience to be what it’s going to be long-term,” Johnson explained. “And we want that service level from our DC for our professional customers to be at the very highest level from Day 1. So we’re growing the market incrementally.”

As part of its strategy, O’Reilly will continue to operate under the Mayasa/Orma brand, at least for now, according to Johnson.

“We’ll transition [to O’Reilly] over time,” Johnson added.

Asked about the growth potential in the Mexican aftermarket, Johnson referenced “one of our major competitors” – AutoZone – which had 669 stores in Mexico as of Feb. 12.

Johnson concluded: “We feel like there’s a pretty big opportunity to grow our store count somewhere in that range in Mexico as well.”

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