The Automotive Industry Faces Challenges From Inflation and Increased Competition From Chinese Automakers
Advance Auto Parts announced plans to shutter about 500 corporate stores and exit 204 independent locations by mid-2025 as part of a restructuring effort aimed at countering weak demand for vehicle parts, according to multiple reports.
The move comes as the automotive industry faces challenges from inflation and increased competition from Chinese automakers offering affordable, feature-packed vehicles. The company’s shares rose 4.5% on the news Thursday afternoon, as reported by Reuters.
In Los Angeles, Advance Auto Parts operates seven locations, according to the company’s website. Stores are situated in Culver City, Crenshaw, Inglewood, Westchester, Century City, Redondo Beach, and Downtown. It is unclear how many of these locations may be affected by the closures.
During a post-earnings call, company executives cited hurricanes, lower consumer spending, and a CrowdStrike outage as factors negatively impacting quarterly results. In the third quarter, Advance Auto Parts reported an adjusted loss of 4 cents per share, an improvement from the $1.19 loss reported a year earlier, Reuters reported.
The restructuring is expected to cost between $350 million and $750 million but aims to boost adjusted operating income margins by over 500 basis points by fiscal 2027.
