Lately, I have been seeing a significant number of announcements about mergers and acquisitions in the truck parts aftermarket. This is happening in the truck dealer, truck parts distributor, and independent repair garage space.
It seems to me that some of the existing dealer groups are looking to expand their footprint even further, and smaller dealerships that perhaps did not have viable succession plans are getting acquired. The same thing is happening on the independent side of the truck parts and service business. Companies such as FleetPride, TruckPro, and other larger distributors with multiple locations are expanding by acquiring smaller entities.
We also are seeing some greenfield offerings as truck parts and service businesses are filling gaps in their coverage area, in part as a reaction to changing customer demand that resulted from the growth in ecommerce sales and the increased focus on last-mile delivery.
I am not in a position to say whether these acquisitions are good or bad. Time will provide an answer to that question. But I do know that fleets likely will have to make some adjustments.
In this age of technology, trucking still is a relationship business. Fleets have built relationships with their local dealer, parts distributor, or repair garage. It is likely that those relationships have been nurtured over many years and result in the fleet having some leverage when it comes to faster service or other considerations.
That may be lost when an acquisition takes place, and the leadership team of the acquired company does not stay on. The fleet may have to start all over building relationships with the new owners and taking steps to make sure they understand the fleet’s unique needs. The good news is that it is likely that some key employees like service writers, technicians, and parts counter workers will remain and can help in the transition.
If you have not done so already, now is a good time to solidify across all levels of the parts and services providers you interact with so that in the event of an acquisition you may still have some friendly faces in the ranks of the “new” company.
Consider starting to cultivate alternative sources for parts and service, so you are not left out if your primary source gets acquired and you suddenly become a little fish in a big pond.
All signs are pointing to continued high levels of M&A activity in the truck parts aftermarket. Make sure you have done all you can to secure parts and service sourcing regardless of market changes.
