GM’s Aftermarket Parts Sales Rise; So Does Warehouse Investment

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General Motors is rushing headlong into the electric-vehicle revolution, of course, and sales are picking up even as the auto company makes mid-course adjustments such as deep-sixing the Chevrolet Bolt, its original all-electric model.

But the automaker is investing heavily in another strain of its business besides EVs: warehouses for distributing replacement parts for the existing “park” of GM vehicles, nearly all of which run on internal-combustion engines. GM’s aftermarket-parts sales have clipped along at double-digit rates of annual increase since Covid, and the company is investing more than $100 million alone in modernizing its largest parts processing center, in south central Michigan.

One big reason for strong aftermarket-part sales, including GM “original-equipment” parts, is that the microchip shortages and resulting supply-chain snarls of the last few years have meant hundreds of thousands of American consumers have been frustrated in their hopes for buying a new vehicle of their choice. In turn, many of them have decided to try to do what they can do to keep their existing vehicle going. In fact, the age of the average vehicle on U.S. roads now is about 12.6 years, according to GM, up from about 12 years just since 2022.

“Car sales were down, but the GM car park is still extremely strong,” John Roth, GM global vice president of customer care and aftersales, told me. “And the industry is going to see another 12% in growth over the next three years.”

As a result, GM is investing in its Burton, Michigan, facility to install new automated storage, retrieval and loading systems as well as a conveyor system to move parts to employee workstations. The facility only opened in 2019. It currently employs about 1,460 people who ship about 15,000 parts orders daily. It’s the primary distribution site for GM Genuine and ACDelco parts.

“We know people are seeking out genuine GM parts,” Roth said. “We know how they fit, they have been engineered well. So there’s been strong loyalty through the years, and now it’s time to lean into that evern further. Consumers have choices in the marketplace, and we want speed and efficiency to that end consumer, pulling friction out of the business. We want to make it easier.”

GM also has invested significantly in technology upgrades in two other major parts centers, in Ypsilanti, Mich., and Memphis. The company has 12 such regional or function-focused product distribution centers in key markets in the United States, and a total of 88 parts-distribution facilities around the globe.

“The sweet spot of our business is vehicles that are four to six years old,” Roth said. “But we still get parts orders for 1953 Corvettes, part of a long tail of taking care of heritage vehicles.”

And there’s another reason, still perhaps latent, that GM’s aftermarket-parts business can expect to grow robustly for the foreseeable future: EV resistance. The majority of Americans remain wary of battery-electric vehicles for one reason or another, and one way consumers can vote out of the EV revolution for now is to keep their existing ICE-powered vehicles running as well and as long as they can.

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