Wyckoff, New Jersey headquartered Car Monkeys Group has risen rapidly over just a handful of years to become a recognized brand name providing consumers immediate access to a massive portfolio of hundreds of thousands of run and tested, low-mileage car, van and SUV parts for a wide variety of 1980 to 2013 vehicle makes and models, via their easily searchable CarMonkeys.com website. Whether customers are looking for engine, rear axle, transfer case and transmission assembly parts for an ’88 Alfa Romeo 2000 series or a Range Rover from 2011, Car Monkeys offers an extremely inexpensive alternative to trying to find new parts and they have won over consumers by being able to ship direct from one of their multiple distributors and auto dismantling centers across the country.
The CKMY brand readily evokes the “grease monkey” idiom, tapping into the established wisdom among savvy consumers that such mechanics have an uncanny knack for getting into the small spaces and fixing problems that would be too difficult for others to address, or for being able to get their hands on hard to find parts. By offering great deals on often hard to get parts, Car Monkeys Group brand presence has grown by leaps and bounds. New and repeat business keeps coming in the door as well thanks to exceptional part quality, an up to 5-year unlimited miles warranty that is unheard of in the industry, a generous no-hassle 30-day return policy, and free shipping to anywhere within the continental United States. With helpful customer service like this and a website that makes it easy for customers to find the part they are looking for, the CKMY brand has easily found a firm footing among new and repeat customers looking to get more life out of their older vehicles, or breathe new life into a classic chassis.
This is a solid industry to be in too, given that the used car business is quite hot by most estimations; a seemingly indisputable reality that is pushing even new car dealers further and further into the game, as they double-down on used vehicle sales in search of higher profit margins. According to National Automobile Dealers Association data from last year, the average used car brought in a 96% higher gross profit than the average new car and the gap widened even further in the preceding year, with average gross profit on used cars up 13% as new car gross profits fell by 7%. Across the industry in that same year, aggregate sales of used vehicles far outweighed new car sales by nearly 170%, with some 42 million vehicles sold, including those sold by independent dealers and individuals.
The used car market is still largely untapped by new car dealers and as this trend increases, with dealers even opening used-only stores in some cases, the market for used parts will likely see continued robustness. Moreover, dealers are looking for the service and parts business, as well as the repeat customers generated through this vector. This is increasingly true as new car margins continue collapsing by comparison, a phenomenon driven in large part by the ubiquity of readily available pricing data on the internet. Growth metrics in the used part wholesaling industry will continue to bring players like CKMY choice returns and the immediate future looks bright for used car parts wholesaling in general, according to a report out last year by IBIS World, which pegged the sector at around $3 billion in revenues, having grown at a steady CAGR of around 0.7% over the past five years. The broader online aftermarket new parts sector gives investors a good reticule for sighting the online used part market’s growth as well. The Hedges & Company projections from late last year on the sector, where they indicated online sales would exceed $6 billion in 2015, after having broken through the $5 billion mark in 2014, gives us a good view of the baseline drivers for online selling in particular.
Adding to this trend’s impact on the used part market is the fact that automobiles are the most recycled consumer product in the world today and there is increasing demand from consumers to reduce the environmental impact of the industry through reducing, recycling, and reusing. Automotive recycling is now increasingly seen as a key, more affordable and therefore consumer accessible parallel to buying new energy efficient cars like hybrids and fuel cell vehicles. Automotive recycling is increasingly seen as a vital part of an overall solution for environmentally conscious consumers, with considerable capacity to delimit the industry’s contribution to air and water pollution, as well as the generation of solid waste. Another key trend here is the growing interest by consumers, particularly in North America, when it comes to restoring older vehicles and building souped-up classic cars. All of these factors are contributing energy to the surging demand for high quality used parts and Car Monkeys Group is poised to capture a great deal of that momentum with their user-friendly approach and easy to use website.
CKMY has quickly emerged as a valued player in this still largely underdeveloped niche of the broader $48 billion auto parts store market here in the United States (IBIS World). With this broader market clearly consolidating as the top four players (roughly 65% of industry revenue in 2015) continue to execute M&A activity, such as when Advance Auto Parts (NYSE:AAP) bought up General Parts International early last year to become the biggest auto parts retailer in NA, valuations for firmly established used parts retailers like Car Monkeys Group are expected continue to benefit accordingly.
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