A product sales chain has many links in it. Ultimately, an end product can be taken advantage of at many points along that chain. Deciding which link(s) to take advantage of is the trick to making profit. If one link happens to be weak at a particular point in time, perhaps another can help support it with added revenue. The company that can realize several revenue points along the chain is the one that will be stable and revenue-positive on a consistent basis.
General Automotive Company Inc., a tier 1 automotive parts supplier and general automotive parts supplier to all levels of the automotive distribution chain, became a publically traded company on February 22, 2008. The company’s two operating divisions, Global Parts Direct and OESource, provide specialized engine parts, government-mandated equipment and global electronics to Chrysler Motors and specialty automotive shops.
In today’s difficult economic times, the company has found itself in a unique position. As main line automotive manufacturers struggle to sell inventories, General Automotive Company has been able to supply engine parts for those drivers wishing to keep and repair their cars instead of replacing the entire vehicle. This has enabled the company to leverage its global parts position and look for growth opportunities through acquisition while maintaining organic growth.
In this regard, the company is somewhat particular about its acquisition opportunities. It seeks only those companies that are niche-oriented and high-value-added in nature. It also would prefer that a target be considered number one in their supply category. Although not an acquisition target at this point, the company has followed requirements to partner with South Koreas’ Edgetec Co., Ltd. to supply back-up video and GPS navigation systems.
The company has been seeing successes from its aftermarket sales efforts. Increases in revenue of over $160,000 were realized in the first three months of 2008. Unfortunately, the company’s new product sales to manufacturers were an offset to these sales. There is little doubt that any automotive related operation will be affected by current economic conditions, but many are positioned for less of a “hit” by them. General Automotive Company Inc. has spread its operations across the spectrum of automotive parts supply and appears ready to weather any twists and turns that may come its way.
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