Motorcar Parts of America (MPAA) Gabelli Funds 48th Annual Automotive Aftermarket Symposium summary

Business Overview and Strategic Direction

• Focuses on remanufacturing and manufacturing automotive aftermarket products, with a legacy in rotating electrical parts and recent expansion into full brake systems.

• Completed a multi-year transition of manufacturing footprint to Mexico and Malaysia, with some outsourcing in China and heavy-duty facilities in India.

• Holds significant market shares: 49-50% in rotating electrical, 18% in wheel hubs, 23% in brake calipers, and growing presence in brake master cylinders and boosters.

• Recent launches include pads and rotors, including copper-free, environmentally friendly products under exclusive North American rights, expected to drive substantial revenue and margin growth, especially targeting professional installers.

• Provides a comprehensive suite of services (Street Smart Suite) including business planning, training, marketing, and inventory management for customers.

Market Trends and Growth Opportunities

• Aftermarket fundamentals remain strong with over 280 million vehicles on the road and increasing average vehicle age, supporting ongoing replacement demand.

• Growth is robust in both retail and professional installer channels, with professional installer segment expanding rapidly in the US, Canada, and Mexico.

• Braking systems now represent 20% of revenues and are projected to quadruple, with high visibility into future growth.

• Product mix mirrors industry split between DIY and DIFM, with most products being non-discretionary and resilient to economic softness.

• Consolidation in the brake-line supplier base and tailored programs for retail and traditional markets are driving growth.

Operational Efficiency and Competitive Advantages

• State-of-the-art, highly productive remanufacturing facilities in Mexico and Malaysia provide cost and quality advantages, with high employee retention and operational sustainability.

• Inventory and logistics are optimized using detailed demographic and vehicle registration data, enabling precise stocking and overnight delivery capabilities.

• Remanufacturing offers cost, quality, and environmental benefits, with original equipment integrity and significant energy and resource savings.

• A scalable infrastructure and 96% offshore production underpin efforts to enhance profitability and operational efficiency.

• The company is not the lowest cost provider but emphasizes best value and quality, leveraging its global footprint to mitigate tariff risks.