Nationally, new car dealership service and parts departments account for 14.6 percent of the
total dollars earned by the industry with an estimated inventory value of $5 billion dollars and an average inventory
of $222,700 per dealer. Research shows that on average, 33 percent, or $74,000, of the inventory stocked by these
dealers has not sold in 12 months or longer.
While the industry held 7 percent growth in 1999 sales, its percentage of unsold inventory has not declined. The
carrying cost of this segment of the inventory creates a great burden on the automotive parts industry as a whole,
not to mention the dealership itself. The average dealership carrying 33 percent of inventory not sold in 12 months
reduces its buying power and ability to service its customers effectively.
While reviewing data supplied by Parts Managers Advisory Committee (PMAC), the 1999 statistics show that, in general,
it is the smaller dealerships that have the poorest numbers. This indicates lack of training, support, and purchase
power. Targeting these dealers for inventory planning and training will produce a higher number of competitive
parts dealers and stimulate greater growth in the automotive parts industry.
