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WORLDPAC

and the US Aftermarket

(a brief Overview)

Becoming a better Supplier by Understanding

your Market and Your Customer

Las Vegas, November 2, 2009

Agenda

•The US Aftermarket

• Some Facts about WORLDPAC

• How to become a more Successful

Supplier to the US Aftermarket/

(WORLDPAC)

Some Facts about the US

Automotive Market

•Over 240 Mill. registered light vehicles

•The average Vehicle age is approaching 10 years

•Over 50 % of the vehicle population are US Domestic

Brands

• New car dealer have only 27 % share of the Service

Business.

Parts OE Manufacturer

•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%

Car Manufacturer Channel

Independent Aftermarket Channel

Parts A/M Manufacturer

Large Chains/ Retailers

Discount Store

WD / Import WD

Tire Company

Oil Company

Auto Repair Specialist

General Repair Shop

Retail StoreDiscount/ Department Store

Tire StoreService Station

•AC Specialist

•Tune-up

•Quick Lube

•Bob’s Auto Repair

• Joe’s Import Repair

•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%

U.S. Aftermarket Service Parts Channels

Hard Parts Sales-$56 Billion(Wholesale Prices - Excluding Tires)

Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

OE Tier 1 vs. Aftermarket Manufacturers

OE Tier 1

•Main Business and Identity is OE •Aftermarket is Secondary but welcome profit opportunity•Will buy from others to complete their parts offering

Aftermarket Manufacturer/

Remanufacturer

•Main Business and Identity is Aftermarket •Many have become “Manupackagers” !

•They market a Brand rather than producing most of their product. This may vary from company to company.

Your Business with these companies is considered Coman Business in the U.S.


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

Vehicle Dealer Channel (OES)

Dealers have a Franchise with a particular Vehicle Manufacturer.Main Business is selling new and used cars.Also have a large Service Departments to support warranty and out of warranty repairs.


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

Warehouse Distributor/ Import Distributor

AC Delco Distributor

WORLDPAC

Many WDs are organized in Buying Groups


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

Repair Specialist

Quick Lube

Muffler Shop

Specializes in specific Repairs

(oil change, muffler , transmission, A/C etc.)


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

WD / Import WD

Jobber Stores

Jobbers traditionally buy their parts from Warehouse Distributors. They deliver to repair shops and sell to retail customers. However, they have been on the decline for many years. There are about 17,000 Jobbers left in the U.S.


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer


•Regional or National

Coverage of stores

•Uniform Look

•Feature their own brands


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

General Repair Shop

Independent Shop

Works on all brands and

does most any kind of

repair

More price conscious

Typically will use

Aftermarket Parts

Import Specialist Repair ShopIndepependant GarageOwner used to work for car dealershipSpecializes in certain Brands (i.e. VW or Toyota)Likes to use OE parts Typical WORLDPAC customer


Auto Manufacturer

Car Dealer

•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

0riginally selling tires but now offering General Service

Tire Store


•Toyota

•VW

•Ford

21,000

Trend

Serv.

Parts

Share

27%





Discount Store

WD / Import WD

Tire Company

Oil Company


General Repair Shop



•AC Specialist

•Tune-up

•Quick Lube



•AutoZone

•Napa

•CARQUEST

•Walmart

•Sears

•Goodyear

• Firestone

•Big O

•Shell

•Mobil

10,000 77, 000 36,000 12,000 114,000 105,000

73%



Source: AAIA

Jobber store

Auto Manufacturer

Car Dealer

Gas Station

Gas stations used to have a major share of service work but have turned into convenience stores.

23

1 2 3 4 5 6 7 8 9 10 11 12 14 16

Dealer

Demand

WORLDPAC Domain

(Premium Segment)

CARQUEST

Domain

Service Demand

There is a Natural Life Cycle Progression in Repair Channel Share and which Brands are desired

Traditional Channel

Specialized & Independent Repair

Shop Domain (Do It for Me- DIFM)

Vehicle Age Years

Vehicle Dealer Domain

Retailer Domain

(Do It Your Self – DIY)

Brand Life Cycle O.E.S O.E.A. A.M. Brand Private Retailer Brand

WORLDPAC Globally Sourced

BrandsBrand Examples Toyota

GM

Bosch

AC Delco

A1 Cardone

Raybestos

Duralast

CARQUEST

5.Automotive Service Channel & Brand Life Cycle

24

WORLDPAC

25

Who is WORLDPAC?

WORLDPAC is a team of more than 2000 strong, who are and will continue to be

passionate about the phrase “Right Part, Right Time”. WORLDPAC associates

believe that although nothing is more important than delivering the right part, on

time, continued growth depends upon much, much more.

26

Corporate Offices and West Coast 250,000 sq. ft. Distribution CenterEast Coast Distribution Center of 250,000 sq. ft.79 branches in US/ Canada.

Who is WORLDPAC ?

27

Three Step vs. Two Step

How We go to Market and What it Means

Benefits

• Consolidates two levels of

profit

• Eliminates the need for high

cost, less productive retail floor

space

• Allows direct communication

with repair specialist

• Maximizes WORLDPAC’s

superior operating platform and

technological capabilities

Parts

manufacturers

and rebuilders

Professional installers

Parts

manufacturers

and rebuilders

Professionalinstallers

Wholesale

jobbers

Warehouse

distributors

Consolidate

Non-retail, two step warehouse distribution

28

Our Customer• WORLDPAC distributes its products to over 26,000 active customers in

three distinct markets

– Professional installers (import repair specialists) that install the part on the

consumers’ vehicles

• ~ 90% of business

– Jobber stores and regional Warehouse Distributors (“WDs”) that redistribute

products to professional installers and the retail public


– Web partners (E-retailers) that sell products to installers and the retail public

via the Internet


• WORLDPAC’s installer customers have the following characteristics

– Size of shop varies from car line to car line and region to region

– Typically 7-8 employees per shop, including 3 technicians

– Purchase ~ $75 in parts with each order

– Average annual volume of $35,000-$40,000 purchased from WORLDPAC

29

We offer our customers coverage for over 25 makes of vehicles for models that are in some cases

up to 20 years old. We achieve this by stocking over 70,000 part numbers sourced from 400

vendors that are located in 16 different countries.

WORLDPAC’S Unmatched Vehicle Coverage

30

WorldPAC Brands

We provide our customers with quality automotive parts for over 300 product categories from

these superior vendors.

WORLDPAC’S Unmatched Product Offering

31

Here’s What We Looked Like in 1996

32

In November 2004 WORLDPAC was acquired by The

International Group (now General Parts International) and is

now a sister company of CARQUEST

Change of Ownership

33

WORLDPAC - Today

1995-2006 Locations

Shared GPI Facility

2007 Locations

34

35

Direct Information Access Link (SpeedDIAL) helps WORLDPAC deliver

“the right part at the right time” by providing our customers access to our

parts catalog, price, availability, and 24 X 7 order entry

SpeedDIAL

36

Shop Management Software Integration –

Catalog to Repair Order

37

Digital Driver – Design Solution 2004

Symbol MC9000-S

AS/400 Delivery / Cash System

Branch Wireless (802.11) Network

Public Cellular CDMA Network

• Research & Establish Manufacturer Direct Supplier Relationships Mainly in Low Cost Countries

• Buy Direct from the manufacturer not “Manupackager” when possible

• Develop OE Tier 1 Supplier Relationships in the “New Vehicle Manufacturer Centers” (China, India, Korea etc.)

• Offer Lower Cost High Quality Alternatives (House Brands) to satisfy our growing customer base.

Electrical Products

(Batteries, Starters, Alternators,

Window Regulators, etc.)

Under Car (Chassis) & Rubber-

Metal Parts (Engine Mounts),

Hub Bearings, C.V. Axles

Service Items

(Filters, Brake Pads, etc.)

Thermal Products

(Radiators,

Air Conditioning), etc.

What is Global Sourcing atWhat is Global Sourcing at WORLDPAC? ?

What WORLDPAC expects from its

Suppliers

The Process we go through to activate New

Suppliers

Launch Phases & ToolsI. Research Phase

-Find Potential Suppliers-Gather Supplier Info & Product Offering and Pedigree (OE vs. AM)

-Evaluate Supplier Capabilities Assess Manufacturing Capabilities Through Factory Visit/ AuditTest & Evaluate Products if Applicable

-Determine Patent Issues & Liability Risks

Master Contact Form

Factory Evaluation Form

Manufacturer Survey

Submit your Product line toWORLDPAC

• Supply your product offering by listing

all OE and competitor part numbers you

have in the WORLDPAC format!

It’s pretty simple:

We need an OE Service Part Numbers

Your P.N.

Price

We are not Manufacturers; we do not

create or rely on engineering drawings!

But – we do watch your quality closely!!

Launch Phases & Tools (Cont.)II. Launch Preparation

-Determine Brand & Positioning

-Negotiate Pricing, Terms and Conditions

-Select & Build Part Numbers (Determine if Parallel or Supersede)

-Negotiate & Execute Supplier and Brand Licensing Agreement

Supplier Agreement

Brand Licensing Agreement (for House Brands)

+ We do require you to carry $ 2 Million in Product Liability Insurance!!

Additional Considerations

• Become a Member of AAIA’s

Auto International Segment

• Learn About ACES and P.I.E.S. Standards

Thank You Very Much!

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