Just as some dealers are adding aftermarket parts to their offerings, a major player in the recycled parts industry also has jumped into the non-OEM parts business.
LKQ Corporation, a Chicago-based company that up until now sold only recycled OEM parts, has acquired Global Trade Alliance, Inc. (GTA), a supplier of aftermarket collision parts in the Midwest. GTA operates about 20 locations serving 15 states, primarily east of the Mississippi River and primarily under the trade names Action Crash Parts and Midwest Fender.
“The acquisition of Global Trade Alliance is LKQ’s entry into the aftermarket replacement parts industry, which complements our existing business of recycled replacement parts,” said Joseph Holsten, president and chief executive officer of LKQ. “The product line of GTA features exactly the type of parts that we often do not have in stock for our customers.”
Holsten said because recycled and non-OEM parts account for almost an equal percentage of the total collision repair parts market, the acquisition will allow LKQ to almost double its potential sales through its distribution network.
The acquisition is another sign of the trend among collision industry suppliers to try to offer more than one product line in order to get the most out of their delivery and distribution systems. Keystone Automotive, the nation’s largest non-OEM parts distributor, for example, has expanded to offer paint products and remanufactured wheels, and some auto dealers have started selling non-OEM as well as OEM parts.
“Our customers were excited about the possibility of one-stop shopping for their alternative parts usage,” Rob Wagman, vice president of insurance relations for LKQ Corp., said of his company’s entry into the non-OEM parts market. “They were very excited about the possibility of making one call for all alternative parts, receiving one statement and writing just one check at the end of the month if they’re a charge customer.”
LKQ Corporation operates 40 sales and processing facilities and 11 redistribution centers that reach most major markets in the United States. Wagman said the availability of non-OEM parts through LKQ will begin first in markets currently served by GTA.
GTA has about 300 employees and had 2003 revenue of about $42.5 million. LKQ paid $30 million for the acquisition, $1.5 million of which was in LKQ common stock and the balance of which was in cash and assumed debt.
