AutoZone Competition
Now Viewing AutoZone's competition in: Automobile Parts Wholesale-Retail (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
If a wholesaler, does the firm have separate commercial sales staffs for retailers and installers? - Companies typically establish separate sales organizations.
If a retailer, what marketing initiatives is the company using to attract customers to its stores? - Radio, TV, and print ads are often used to draw traffic.
Does the company offer rebuilt parts? - Rebuilt parts are bought from auto recyclers.
Does the company offer a warranty on parts sold? - Some retail chains offer customers a separate parts warranty, better than the one offered by the manufacturer.
What special services does the business offer to compete with larger companies? - Examples include specialty machining, multiple daily deliveries, and technical assistance.
Competitive Landscape
Demand for aftermarket 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 machining or fast delivery. Average annual revenue per employee for wholesalers is about $535,000, meaning the segment is capital-intensive. Average annual revenue for retailers is about $120,000, meaning the segment is labor-intensive.
Full Industry Overview For Automobile Parts Wholesale-Retail
Business Challenges
CRITICAL ISSUES
Auto Parts Spending Driven by Economy - Because auto parts sales depend on auto driving, demand decreases during recessions. During economic downturns, tourists and businesspeople travel less, and car owners delay maintenance and repairs. For example, sales at auto parts retail stores grew 4 percent in 2000, then fell 1 percent in the early 2000s recession.
Competition from Mass Merchants Pressures Prices - Retail auto parts stores face greater competition from large retailers such as Wal-Mart, Costco, Sears, and supermarket chains. These retailers are large enough to buy items directly from manufacturers, pressuring prices of auto supply stores. Mass merchants carry high-volume items such as oil, additives, lubricants, cleaners, mats, and wipers.
Industries Where AutoZone Competes
- Retail
- Auto Parts Retail(primary)
- Nonstore Retail
- Internet Retail
