UAP Inc. officially launched the NAPA identity in Canada at its National Business Conference in Toronto, Ont., this morning.
In front of more than 1,000 associates, corporate personnel suppliers and a veritable who’s who of the U.S.-based NAPA and Genuine Parts Company executives, UAP Inc. president and CEO Larry Samuelson said that the next years promised to be one of the most important for the organization.
“This meeting is really the beginning of our future together. The aftermarket has changed a great deal over the past 10 years. It is a very different business than when I began 27 years ago. All businesses and all organizations need to reinvent themselves.
“I have never been as excited about a new sales years as I am about this one. In my many years of visiting customers, we have not always agreed on everything, but we have always agreed on one thing, that your business must make more money each year.”
UAP’s relationship goes back to nearly the beginning. Both companies have their roots in the 1920s. Suggestions of mergers can be traced back to the 1970s, with the share purchase partnership finally occurring in the late 1980s with the UAP/NAPA Western Partnership and a 20% holding in UAP Inc. being sold to Genuine Parts in 1988. GPC completed its purchase of the remaining shares of UAP in 1999. UAP has a revenue of more than $700 million and operates more than 600 wholesaler outlets across the country, of which some 180 are company owned. Genuine Parts Company is the largest shareholder within the NAPA organization and operates 5,800 stores in the U.S., approximately 800 of which are owned by the company. GPC’s annual revenue of $8.3 billion U.S. of which 51% is from its automotive business. Other business units are in the industrial, office products and electriccal/electronics sectors.
Before embarking on any detailed description of the changes, Samuelson laid out some of the Canadian aftemarket’s challenges.
By the middle of last year, the economy in Canada had already begun to soften, he said, a situation worsening in the post September 11 market. He reminded attendees that the aftermarket’s prime vehicles are in the six to twelve year old range, but said that this traditional target market is not expected to grow, and that the average vehicle age, at 8.3 years, was expected to remain the same for the next few years.
“Our target market is the six to 12 year old vehicle. Vehicles younger have traditionally been captive of the dealer; older vehicles have been left to the retailer.
“Our total target market has not changed, but the number of vehicles 13 years and older is expected to continue to grow. This is a real opportunity.”
Samuelson said that the traditional jobber has all but driven away the DIY business, leaving some 65% of the DIY market mainly to Canadian Tire.
“We can make a real case that retail cash business has been given by default to Canadian Tire. The traditional parts store has behaved as if they didn’t want this business.
“The aftermarket is still almost $15 billion sales opportunity and parts sales represent almost $9 billion. UAP and its customers have only 8% of this.” The DIY business in Canada is $2.5 billion according to Dennis DesRosiers. DesRosiers said that the organization could see great benefits of the changes if they can integrate the programs effectively. “If they can get it firing on all cylinders, so to speak,” said DesRosiers.
“Tremendous opportunities are here for all of us. No organization has the luxury of standing still. We must collective capitalize on the opportunity and we are going to give you the tools to do so,” said Samuelson.
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