The Advance Auto Parts Shake-Up
Advance Auto Parts drastically changed the landscape of the automotive aftermarket in the fall of 2013 when it made a blockbuster purchase of General Parts International Inc., the North Carolina–based parts and equipment distributor and retailer.
The deal, which closed at just north of $2 billion, put General Parts’ CARQUEST and WORLDPAC brands under the Advance Auto roof and created an auto parts giant that now accounts for more than 74,000 employees and nearly $10 billion in annual sales.
Now, a year after the initial announcement, changes are beginning to set in for repair businesses across the country. And, as Advance Senior Vice President of Commercial Al Wheeler explains, this is only the beginning.
What was the thinking behind the acquisition?
Really, it was an opportunity to bring two great organizations together. It certainly positions Advance as the largest automotive aftermarket provider, but that wasn’t necessarily the only motivation. It wasn’t necessarily about being the largest, but more about bringing together two great cultures, two common cultures.
When you get into it fundamentally, we look very much alike in our commitment to our customers and the things we’re trying to do are very much the same. From that respect, it gives us a chance to accelerate our growth and also gives us a national footprint.
When you think about CARQUEST and the combination of Advance, you essentially go from Key West, Fla., to Alaska and all points in between. It gives us this foundational, national footprint that allows us to serve our customers across North America.
What has the impact been on repair facilities?
It’s multi-fold. Certainly, as you look at the growth of the inventory availability and new product lines, it allows a pretty extensive acceleration and expansion of our supply chain, which allows us to be in a better position to serve our customers.
One of the things we focus on is having inventory availability as close to the customer—in this case, the repair shop—as possible. Obviously, that impacts our availability for a shop.
That is a significant gain from the combination of the two organizations.
It also allows us to look at some of those specific customer segments, like import shops. With the combination of Worldpac, which was in the CARQUEST system, and then Auto Parts International, which was part of the Advance system, that gives us a very compelling product and service solution to our commercial customers. We’ll be able to reach more shops, and be able to help more shops improve their businesses.
What has changed as far as delivery of parts?
One of our initial first steps, and this was just a few months into it, was to open availability to cross-source across all of our stores. So, Advance stores can now source parts from CARQUEST stores, and vice versa.
The goal is, How do we service our customers better? One of the big advantages we have now is this proliferation of stores across the country, providing more coverage to our commercial customers. There’s some overlap, and as a company, we’re indifferent about where the parts come from, as far as CARQUEST vs. Advance. No matter the store, we want to get the right parts to the right shops as quickly as possible.
Will there be any rebranding efforts at any point for shops?
We are currently painting that picture of all these brands being part of the same group, but we’re working through what makes the most sense for our customers, and we’re working with our shop customers on this.
Branding is a very large scope. We’ll continue to have CARQUEST stores and Advance stores, and we’ll continue to support the CARQUEST independent channel as well; Worldpac will also operate independently.
It’s a picture that’s being painted as we speak, but we’re most focused on bringing the best assortment of products and coverage that allows shops to fix any vehicle the first time, no matter who their customers might be.
What are the effects from a program standpoint for shops?
We’re working to combine solutions for the shops in our networks. For CARQUEST, we have our banner marketing program called TechNet, which has more than 5,300 shops across North America. So, the focus now is, How do we bring the Advance programs and the things they’ve worked on for years into these CARQUEST shops to better their businesses?
As we bring our solutions together and begin to combine these programs, it will only make them stronger. TechNet will only continue to get better. When you look at things like the MotoShop suite of technology that Advance brings, from a shop perspective, this is something that will add great value to these shops.
What has been the initial feedback from repairers?
It seems like there’s a great deal of excitement about bringing these organizations together. There’s a lot of expectations of us now to bring these better solutions to them, and that’s the way we like it.