AUTOMOTIVE aftermarket giant GPC Asia Pacific has bought collision parts supplier Auto Parts Group with plans to enter Australia’s $10 billion auto collision parts market.

The purchase of Auto Parts Group (APG), for an undisclosed sum, significantly expands GPC’s customer reach and, according to GPC Automotive CEO Wayne Bryant, strengthens the company’s core and future proofs the business.

“For quite some time we have been looking at the collision industry and its players, those who we think would be a good fit for our organisation,” he told GoAutoNews Premium.

(L-R) James Knox, Executive General Manager of APG, Stephen Campbell, Founder of APG, Wayne Bryant, CEO of GPC Asia Pacific’s Automotive Division

“The collision market is a strong, resilient sector that’s a really attractive adjacency for us.   

“It’s also one that we don’t particularly participate in today. Repco and Napa (both assets of GPC) do sell some products into that market, but it’s relatively small. 

“Our core business is selling to people who service and repair cars in the aftermarket and to DIY car enthusiasts, so we don’t really participate in collisions. So (the purchase) is attractive and interesting.”

He said that the total market in collision parts was worth about $10 billion a year, with APG playing in a part of that market worth about $5 billion.

“It’s an attractive, resilient sector. We’re not seeing any pronounced change in collision frequency in this sector over the years.

“There are changes to the type of collision, but there is still a requirement for parts and sensors and all of those other components.

“So we see it as a really attractive industry, and when we look at it across the world, we’re seeing some really consistent trends across the world that gives us confidence for the future.”

While he said the market is strong, Mr Bryant said he could not envisage GPC or APG getting involved in the actual collision repair market itself.

“We’re an automotive parts distribution business,” he said.

“We’re all about serving workshops that fix cars for a living, or fleet owners who manage their own fleet. We try not to blur the lines by competing with our customers.

“We do have an authorised service network in Repco, but we don’t own those stores. They’re independently owned workshops. So we don’t run workshops.”

GPC and APG: Left: Wayne Bryant, CEO of GPC Asia Pacific’s Automotive Division. Right: Stephen Campbell, Founder of APG

Mr Bryant said GPC’s path to buying APG started by developing a good relationship with APG owner Stephen Campbell and CEO James Knox. Mr Campbell, who owned 100 per cent of APG, has now left the business and Mr Knox, and 300 APG employees, will work for GPC.

“It’s a good business. It’s well run. It’s well thought of in the market, and we’ve got a really good cultural match,” he said.

“When you do an acquisition, culture is really important. So we became interested in that business.”

Mr Bryant said that Mr Knox will join his leadership team at GPC Asia Pacific’s automotive division. APG will continue to operate as its own entity.

“The APG brand stays the same, the logo stays the same, the marketing stays the same,” he said.

“It will continue to do what it does and will effectively become a collision business within our automotive business. So it will operate alongside Repco, Napa, Rare Spares, Spares Box, and even our Two Wheel division, which has the AMX superstore business.”

Mr Bryant said that although APG will operate with autonomy, some shared services will be provided to give support.

“But it will have a lot of its own services – such as the sales team and distribution centres – and its own processes,” he said.

“There are things like property services or tax or IT infrastructure where we can provide them support, without taking over, so not much different to a company outsourcing to someone else.”Mr Bryant said APG was already “a good business”.

“It’s performing well, it’s fit and healthy. It doesn’t need to be transformed. It just needs to be nurtured and supported,” he said.

“”It’s not a business that you know might be in distress, that you’ve got to bring in quickly and change – that’s not the case. This is a good business that can continue to operate, and we’ll just nurture it and support it.”

APG has distribution centres (DCs) in Brisbane, Sydney, Melbourne, Adelaide and Perth which Mr Bryant said they would continue to use because of unique packaging.

“The product is packaged differently, and needs to be transported differently to our other businesses because APG services collision shops direct from its DCs to the collision shops,” he said.

“Our other DCs send products to our branches, and then the branches sell on to customers. So APG needs to continue to have its own centres.”

Mr Bryant said APG was excellent at collision body parts but it didn’t have a lot of the products or access to products that appeal to that market.

“Through Repco and Napa, we know that collision shops would be buying from other suppliers,” he said. “So coolants, tools and consumables, thermal control products on the front end of vehicles, all those sorts of things we sell every day of the week through our Repco and Napa businesses. 

“We’ll be looking to say to our APG team how it can provide access to our whole range.”

He said APG also has a growing customer base.

“There’s more cars on the road, they’re travelling more and they’re ageing,” he said.

“It means we have to carry a wider, more proliferated range of parts but that’s part of what we’re good at. 

“At GPC, we do it all around the world, and APG’s business model is no different. So by being committed to the investment in APG’s distribution centre infrastructure, we can actually enable them to carry a wider range of parts.”

Mr Bryant said there were still very good supplies of parts for cars, including Holdens and locally-made Fords.

“As time goes on and those vehicles get older, parts can be recycled and new opportunities come into play,” he said.

“Aftermarket parts are an opportunity so we’re really well placed to continue to supply those customers with, as an example, Ford and Holden parts well into the future. The same can be said for other vehicles in the car park.

“Our Rare Spares business is selling a lot of VL, VN and VP Commodore parts now. Who would have ever thought that a plastic bumper bar would be considered something you’d buy from Rare Spares. But they are.”

Mr Bryant said he now expected significant increases in product lines, warehousing, workers and revenue from the APG acquisition.

He said APG was soon to relocate its Brisbane DC into a bigger and better building. It has also recently completed a substantial expansion of its Sydney DC and now, after the purchase, will upgrade and relocate the Melbourne DC while having future plans for Perth and for its operations in New Zealand.

“We’ve got a pretty optimistic view of the automotive industry and what our business could look like in the future,” he said.

“We plan to scale and grow … bigger DCs, more inventory, grow the team as well. We can only see upside in terms of team member count and the growth opportunity that comes with it.”