MOTORCAR PARTS OF AMERICA INC

Motorcar Parts of America, Inc.

Overview

Motorcar Parts of America, Inc. is a supplier in the automotive aftermarket focused on non-discretionary replacement parts and test solutions/diagnostic equipment. The company emphasizes technology and services to support parts and solutions for current and future vehicle needs.

Core product groups

• Hard Parts
  • Light-duty rotating electrical products (alternators, starters) and brake-related products (calipers, boosters, rotors, pads, master cylinders, wheel hubs and bearings).
• Test Solutions and Diagnostic Equipment
  • Benchtop testers for alternators and starters, equipment for pre- and post-production testing of electric vehicle components, software emulation, power supply hardware, and related services and training.
• Heavy Duty
  • Aftermarket replacement parts for heavy-duty trucks, industrial, marine, and agricultural applications.

Market structure

• Segments the aftermarket into:
  • Do-it-yourself (DIY) market served by large retailers and online resellers.
  • Do-it-for-me (DIFM) market served by warehouse distributors, dealer networks, and commercial divisions of retailers.
• Products are distributed to both DIY and DIFM channels. The distinction between DIY and DIFM has blurred as retailers expand distribution and store presence.

Scale and reach

• Operates in the approximately $130 billion North American aftermarket for replacement hard parts.
• Participates in an $11+ billion global market for automotive test solutions and diagnostic equipment.
• Active in a $40+ billion market for heavy-duty aftermarket replacement parts (truck, industrial, marine, agricultural).

Product catalog and brands

• Carries approximately 44,000 SKUs.
• Private-label and branded products include Quality-Built, Pure Energy, D&V Electronics, Dixie Electric, and DelStar.
• Maintains an extensive catalog and product identification system (catalogs, data sheets, and a technical glossary).

Customers and concentration

• Sells to large automotive chains (Advance Auto Parts, AutoZone, Genuine Parts/NAPA, O’Reilly Auto Parts) through about 25,000 retail outlets.
• Also serves warranty replacement programs (OES), professional installers, and a broad set of warehouse distributors.
• Customer concentration is high: in fiscal 2026 the three largest customers represented 85% of net sales, with the largest customer comprising 42% of net sales. This concentration exposes the business to financial performance risk if any major customer declines or renegotiates terms.

Geography and sales footprint

• In fiscal 2026, approximately 99% of products were sold in North America and about 1% in Asia and Europe.

Operations and manufacturing

• Remanufacturing is the primary production method for non-discretionary parts, conducted mainly in Mexico and Canada, with some activity in Malaysia.
• New product manufacturing and assembly occur in Canada, Malaysia, and India.
• Remanufacturing follows a lean manufacturing approach: Used Cores, disassembly, cleaning, component replacement, testing, and final assembly.
• The company recycles materials (metals, water, cardboard) and emphasizes environmental sustainability.

Core materials and sourcing

• Uses Used Cores from customers (core exchange programs) and purchases from core brokers.
• Purchases Finished Goods from approved suppliers, including several in Asia.
• Maintains supplier qualification, inspection, testing, and periodic audits per IATF 16949 or ISO 9001:2015 standards.
• Exposed to foreign-sourced component risks such as tariffs, port delays, and supply disruption.

Quality and regulatory systems

• Certified to ISO 9001:2015 and IATF 16949 for quality management.
• Maintains formal training and education programs for customers and internal staff.
• Information security program with Audit Committee oversight; cyberrisk management and insurance are in place.

ESG, governance, and risk management

• Emphasizes environmental stewardship through remanufacturing and recycling.
• Focuses on safety, inclusion, and community support; workforce includes diverse and unionized employees in several locations.
• Maintains formal information security governance, including Audit Committee oversight, IT steering, and incident response teams.

People and facilities (as of March 31, 2026)

• Employees: approximately 5,600 total (300 in the United States, 4,900 in Mexico, 200 in Canada, 200 in Malaysia and China); about 5,200 are production employees; approximately 4,700 production employees are covered by a local union in Mexico.
• Facilities:
  • Torrance, CA – Remanufacturing, Warehouse, Administrative/Office; 231,000 sq ft; Leased; expires March 2032.
  • Tijuana, MX – Remanufacturing, Warehouse, Office; 312,000 sq ft; Leased; August 2033.
  • Tijuana, MX – Distribution Center and Office; 410,000 sq ft; Leased; December 2032.
  • Tijuana, MX – Remanufacturing, Warehouse, Office; 199,000 sq ft; Leased; December 2032.
  • Tijuana, MX – Core Induction, Warehouse, Office; 173,000 sq ft; Leased; December 2032.
  • Tijuana, MX – Warehouse; 68,000 sq ft; Leased; June 2026.
  • Malaysia – Remanufacturing, Warehouse, Office; 114,000 sq ft; Leased; through September 2032.
  • Singapore – Warehouse and Office; 18,000 sq ft; Leased; December 2027.
  • Shanghai, China – Warehouse and Office; 27,000 sq ft; Leased; March 2027.
  • Ontario, Canada – Remanufacturing, Warehouse, Office; 157,000 sq ft; Leased; September 2026.
  • Ontario, Canada – Manufacturing, Warehouse, Office; 35,000 sq ft; Leased; December 2027.
• Operates a 410,000 sq ft distribution center in Mexico and a warehouse/distribution center in Malaysia, among other facilities.

Financial and capital structure

• Debt and liquidity
  • Debt outstanding under the credit facility: $94,668,000 (as of March 31, 2026) at variable interest rates.
  • Convertible notes: $32,000,000 in aggregate principal amount issued March 31, 2023, due 2029 (10.0% coupon).
  • Weighted average interest on debt: 6.79% as of March 31, 2026 (compared with 7.46% as of March 31, 2025).
• Covenants and potential indebtedness
  • The credit agreement includes covenants; waivers may be required if defaults occur, which could carry costs or restrict operations.
• Other financial considerations
  • The company is active in long-term strategic acquisitions and integration and faces exposure to currency and tariff risks, supply chain disruption, and global macro conditions.
  • Approximately 25,000 retail outlets across major automotive chains are customers through the DIY channel, with additional DIFM and warranty programs served.

Operational summary

Motorcar Parts of America is a diversified aftermarket supplier with a primary emphasis on remanufacturing and non-discretionary parts, supported by a test/diagnostic equipment business and a heavy-duty segment. The company operates a global manufacturing and distribution footprint with a substantial North American focus, maintains formal quality and environmental programs, and carries debt and convertible instruments while managing supply-chain, tariff, and currency risks.