Napa Auto Parts 2002 Annual Report Download - page 10

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of 8.3 years old. Vehicles over 10 years
old now represent nearly 40 percent of
the vehicle population. Most important,
the number of vehicles entering the
6+ year range — a tremendous oppor-
tunity for us — are expected to grow
significantly in the next five years as a
result of record new vehicle sales begin-
ning in the mid-1990’s.
High-Volume, High Ticket Needs
Light trucks and sport utility vehicles
(SUVs) continue to be extremely
popular — accounting for more than
half of new vehicles sold in the past
two years. Since 1992, the light truck
population has increased 50% and now
comprises over 38% of the total light
vehicle fleet. Replacement parts for
these vehicles tend to be more expensive
and NAPA stores are well positioned
to meet their high-volume parts and
accessory needs.
Opportunities for
Expanded Distribution
We believe that continued consolida-
tion of aftermarket players will result
in greater share for our strong NAPA
brand and business model. In 2002,
our group converted several significant
Non-NAPA auto parts operations into
both independently and company-owned
NAPA AUTO PARTS stores. In 2003,
NAPA will explore more options for
additional high-quality changeover
opportunities, as well as expansion into
new markets. Our goal is to open a
minimum of 50 new independently
owned and 50 company-owned stores,
as well as improve performance
in existing markets by reviewing
change-over opportunities, new
ownership potential and store
location updates.
A PREMIER BRAND
Each day, millions of people choose
NAPA to meet their automotive parts
and accessories needs. That’s because —
whether they own an automotive service
facility or they are a do-it-yourselfer —
the NAPA brand means quality parts
and quality people. Backed by the
NAPA National Warranty Program, as
well as parts and labor warranties for
automotive repair facility customers, the
quality of NAPA parts is legendary.
Just as important are the trusted pro-
fessionals who wear the NAPA AUTO
PARTS uniform. In both product
knowledge and customer service, they
are highly regarded for their under-
standing of the automotive parts busi-
ness and what it takes to succeed. In
fact, no other auto parts supplier has
more ASE*-Certified Parts Specialists
than NAPA (*Through exams and
proof of performance, the National
Institute for Automotive Service
Excellence (ASE) certifies qualified
professionals in the automotive parts,
service and repair industry).
EMPHASIS ON TECHNOLOGY
Electronic Connectivity
The Automotive Parts Group continues
to distinguish itself through a commit-
ment to new and improved technologies.
NAPA AUTO PARTS stores will con-
tinue to invest in electronic connectivity
that will streamline their sales and
delivery process, making NAPA and its
customers more efficient and
profitable. NAPA PartsPRO electronic
cataloging prompts store personnel
through screens with key vehicle infor-
mation to help them quickly and
accurately find the parts a customer
needs. Images of each part, plus vehicle-
specific component diagrams and other
graphics put a world of knowledge at
the operator’s fingertips, increasing
their service level and value to customers.
Harnessing the power of the Internet,
our new PRO-Link software connects
repair facilities with NAPA stores to
provide faster, more complete access
to parts inventory. These and other
technologies make it easier for profes-
sional customers to do business with
our stores, increase customer loyalty,
and help our stores build significant
new sales.
Enhanced Store Inventories
Today’s vehicles utilize more specialized
and unique parts than ever before. The
ability to effectively track and assess
NAPA AUTO PARTS stores’ inventories
to properly align their product supply
with local market needs is critical. A
new electronic tool called Marketplace
Inventory Classification (MIC) will be
rolled out in 2003 to fulfill this require-
ment for the NAPA stores. Using vehicle
registrations by ZIP codes and individ-
ual store sales, MIC can pinpoint and
forecast products that will be fastmovers
and help NAPA stores have the right
parts in stock when customers need
them. To that end, we continue to
upgrade the capabilities of our inventory
systems and the electronic connection
between our Distribution Centers and
NAPA AUTO PARTS stores.
KEY OPPORTUNITIES FOR GROWTH
From our NAPA AutoCare Center
Program to new channels for distribut-
ing our products, the Automotive
Parts Group and NAPA have many
initiatives in place to generate sales
and profit growth.
Wholesale Markets
Supplying parts to professional installers
and repair facilities has always been our
greatest strength and continues to be
a growth area for the Automotive
Group. From our unparalleled parts
inventory to new technologies to help
increase productivity and profitability
for stores and their customers, we
believe no other company is better
suited to service the installer customer
automotive parts group net sales
IN MILLIONS OF DOLLARS
98 99 00 01 02
3,262 4,085
4,164
4,253
4,335