Pep Boys No Longer For Sale
Midtronics Sells Battery Chargers To Schumacher
Heavy Duty Aftermarket Sales Rising
Tips For Finding Auto Flood Damage

PEP BOYS NO LONGER FOR SALE

Pep Boys has announced that they are no longer actively seeking to be sold.

At the company's Second Quarter financial report, Bill Leonard, the chairman and CEO of Pep Boys, announced that the board of directors is no longer actively looking to sell the auto parts retailer.

Leonard said that the company had received several offers but no buyer put an offer on the table to purchase the entire company.

"We now have to focus on getting back to a consistent profitable level," Leonard told analysts. "We need to increase our margins on both retail and service. Service currently is the key. We have been increasing the number of flat-raters in the company. We need to continue doing that. The more Master Techs and technicians we have, the more service work we can perform for our customers."

Reflecting the huge demand for automotive technicians, Leonard noted, "We have less Master Techs and techs today than the company had three years ago, and I think we've said 'no' to too many people who have come in for service. And, we clearly need to say 'yes' and be able to handle them."

"Obviously, as a public company, there can always be offers made in the future," Leonard added. "However, our focus now is returning Pep Boys to consistently profitable returns."

Leonard added that Pep Boys Board may consider selling the company after Pep Boys' operating results have improved.

MIDTRONICS SELLS BATTERY CHARGERS TO SCHUMACHER

Midtronics Inc. has sold its professional battery charger product line to Schumacher Electric.

The product line includes hand-portable and bench top chargers as well as wheel-based units designed for use by professional technicians. The chargers are currently distributed under the Midtronics ChargeXpress brand as well as private label brands for major transportation market suppliers.

Midtronics says it will continue to develop and market its line of technology-based and diagnostic chargers, which are not included in this deal.

"This agreement is truly a win for all involved," said Steve McShane, president and CEO of Midtronics, in an official announcement. "Midtronics will focus entirely on our core business of providing technology-based products for battery management including our line of battery testers...while Schumacher Electric gains a key product and market segment for its thriving battery charger business."

HEAVY DUTY AFTERMARKET SALES RISING

Medium and heavy duty truck aftermarket sales rose 6.2% last year and are forecast to continue rising, reaching $73.9 billion for 2006, according to a new study by the Automotive Aftermarket Industry Association (AAIA) and the Heavy Duty Distribution Association (HDDA).

Following relatively flat growth in 2001-2003, when annual increases were less than 1 percent, medium and heavy duty aftermarket sales picked up in 2004, beginning a three-year growth trend that is continuing through this year.

Sales have increased for a variety of different reasons, including rising Class 4-8 vehicle sales, increases in the average number of miles driven, 2.5 percent growth in truck registrations since 2000 and the nation's dependency on the trucking industry for transportation.

The complete 2006 Medium & Heavy Duty Aftermarket Profile is available to AAIA and HDDA members for $125 and $225 to non-members. To order by phone, call 301-654-6664 or order online at www.aftermarket.org.

TIPS FOR FINDING AUTO FLOOD DAMAGE

One of the results of the devastation left behind by Hurricane Katrina is a large number of flood-damaged vehicles.

The National Automobile Dealers Association (NADA) is urging industry professionals as well as consumers — even in areas far from the hurricane such as California — to remain alert to the fact that some individuals may attempt to sell or trade flood-damaged used vehicles in the months to come.

"Dealers are very concerned that these affected vehicles could enter the used car market," said NADA Chairman Jack Kain. "Fortunately, there are steps that car-shoppers can take to detect water damage and protect themselves," he added.

While there is no sure way to detect vehicle flood damage, the NADA offers 10 inspection tips that may be used to detect significant water damage.

At a minimum, a prospective buyer or vehicle inspector should:

1. Check the vehicle's title history, it may state whether it has sustained flood damage;

2. Examine the interior and the engine compartment for evidence of water and grit from suspected submersion;

3. Check for recently shampooed carpet;

4. Look under the floorboard carpet for water residue or stain marks from evaporated water not related to air-conditioning pan leaks;

5. Inspect for rusting on the inside of the car and under interior carpeting and visually inspect all interior upholstery and door panels for any evidence of fading;

6. Check under the dashboard for dried mud and residue, and note any evidence of mold or a musty odor in the upholstery, carpet or trunk;

7. Check for rust on screws in the console or other areas where the water would normally not reach unless submerged;

8. Look for mud or grit in alternator crevices, behind wiring harnesses and around the small recesses of starter motors, power steering pumps and relays;

9. Complete a detailed inspection of the electrical wiring system looking for rusted components, water residue or suspicious corrosion;

10. Inspect the undercarriage of other components for evidence of rust and flaking metal that would not normally be associated with late model vehicles.

Originally published in the October 2006 issue of Automotive Booster Magazine.
Copyright 2006 by KAL Publications Inc.