Josh D’Agostino says there’s a big hole in the Orange County auto parts market.
D’Agostino is director of new business development for Atlanta-based Genuine Parts Co., which is the parent of Napa Auto Parts. The company plans to expand in OC with a 5,000-square-foot Napa Auto Parts store in Anaheim, expected to open later this year.
Most of the auto parts stores that have opened in recent years have opened in Los Angeles and San Diego, D’Agostino said. But more people have moved in between those areas and the auto parts business hasn’t kept up, he said.
The company has identified at least five other locations in OC, which may open shortly after the Anaheim store or at the same time.
Napa Auto Parts is a big name on the East Coast and in the Midwest, but not so entrenched on the West Coast. It has a few locations already in OC.
Finding real estate is the challenge, he said. High-priced leases, land costs and gas prices have squeezed profits, D’Agostino said.
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Mercedes of Anaheim: city counts the most dealerships |
On the upside, new car sales are down as people are keeping their cars a bit longer, which typically bodes well for auto parts stores.
“Traditionally, in slower economies, people fix their cars,” he said.
Napa Auto Parts sells to independent repair shops, dealers, wholesalers such as Goodyear Tire & Rubber Co. (the bulk of its business) and do-it-yourselfers, which is made up of a large Hispanic contingent, he said.
Since OC counts a large Hispanic population, it is an ideal place for Napa Auto Parts to grow, D’Agostino said.
In OC, Napa will compete against Raleigh, N.C.-based Carquest Corp., Memphis, Tenn.-based Auto Zone Inc. and independent suppliers among others.
Napa has about 6,000 stores nationwide, including 1,000 company-owned stores. The OC stores will be independently owned. Napa Auto Parts is not a franchise.
Genuine Parts is a distributor, which makes its money selling parts to Napa Auto Parts stores. The company is looking to add 400 stores across the nation in the next five years. It’s also seeking prospective owners who have $550,000 to invest.
Some store owners are former dealer parts managers but many are entrepreneurs of varying backgrounds. In some parts of the country, they are farmers who are expanding their income potential.
Genuine Parts offers marketing and advertising support to stores. It doesn’t charge fees or royalties.
Store Openings
Canali and Calvin Klein have opened at South Coast Plaza. Canali is a 3,100-square-foot men’s clothing, shoes and accessories store.
Halsea LLC, a maker of colorful travel luggage and accessories, has opened a store in Newport Beach. It is owner Sally Bartz’s first store.
Bartz, who has designed for companies such as Quiksilver Inc.’s Roxy, Volcom Inc. and Paul Frank Industries Inc., has been selling her bags for the past two years online and in boutiques such as Elle H in Laguna Beach, Patina in Costa Mesa and Shutters on the Beach in Santa Monica.
Auto News
OC’s 142 franchised automobile dealers had $8.5 billion in total sales in 2007 and sold 166,788 new autos, according to a recent economic-impact report put out by the Orange County Automobile Dealers Association of Costa Mesa.
In 2007, sales were down 10.5% for the dealers from $9.5 billion in 2006.
Last year was the worst year since 1999 for new auto sales, according to the California Motor Car Dealers Association, based in Sacramento. New vehicle registrations,a barometer of new auto sales,in the state were 1.9 million, a decline of 8.2% from 2006.
In OC, the drop was even greater. The number of registered vehicles fell 9.2% last year to 165,919.
A number of factors were attributed to the decline: tight credit markets, rising unemployment, falling housing values, consumer debt and high gas prices.
The dealers sold 166,708 new vehicles altogether and 122,830 used vehicles. On average each dealer sold 1,174 new autos and 865 used autos.
Service and parts sales made up $1.1 billion of the $8.5 billion in sales.
Auto dealers are significant contributors to city coffers. Respective OC cities collected a total $67 million in sales tax.
The city with the most dealers is Anaheim, with 16; followed by Costa Mesa, 15; Tustin, 13; Irvine, 12; and Santa Ana and Huntington Beach, each with 11. Each of those cities has an auto mall, a cluster of auto dealerships together.
The Costa Mesa dealers group prepared the study based on data from the National Automobile Dealers Association.
Meanwhile, the report said OC’s 142 dealer employed about 13,632 people, which made it the third largest group of employers in OC. Walt Disney Co. and University of California, Irvine are the top employers, respectively.
The dealers paid $1.6 billion in wages and benefits, according to the report. The dealers also contributed $12 million to charity, up 79% from 2006.
