Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

LKQ Corp plans to increase its parts and services business by 0.5-2.5pc in 2020, compared with an actual growth of 0.3pc in 2019.


The Chicago headquartered company will focus on improving its productivity during the year despite global uncertainties and economic headwinds in Europe, according to Dominick Zarcone, president and chief executive officer, LKQ.


In 2019, LKQ’s aftermarket purchases grew by 5.4pc to $6.45bn from $6.12bn in the prior year led by purchases in its self-service and crush only cars segment, which grew 5.2pc to 591,000 vehicles during the year compared with 562,000 vehicles in 2018. 


However, low steel scrap prices impacted LKQ’s self service operations where the cost per vehicle decreased by 5pc during 2019.

The company’s wholesale salvage cars and trucks business reported a decrease of 0.3pc to 309,000 vehicles purchased in 2019 compared with 310,000 vehicles in the prior year. Its European operations reported a steeper decline of 10.7pc to 25,000 vehicles purchased compared with 28,000 in the previous year period.


The company’s strong performance in its American business, where it entered a three-year contract with a top-tier customer in Q3, was offset by the losses caused by a fire at its Greenville, Michigan aftermarkets parts center. The December 2019 incident destroyed the center and the company has taken actions to keep the volume and business disruption from the event at a minimum.


The specialty auto parts manufacturer and auto scrap recycler’s revenue from its North American business grew by 2.5pc in 2019 despite the termination of its contract with Fiat-Chrysler (FCA) for batteries and a 1pc decrease in its collision- and liability-related auto claims. However, its European operations were affected by the softening fundamentals of the EU’s economy, even though LKQ’s business there grew by 1.2pc.


LKQ reported consolidated revenue of $12.5bn in 2019, an increase of 5.3pc from $11.9bn in the prior year. Adjusting for other costs, the company’s net income for the year increased by 7pc to $736mn compared with $691mn in 2018.

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