Carl Icahn has big plans for the auto parts sector in U.S.

The billionaire investor is looking to acquire thousands of auto-repair shops, with the idea that they will buy products directly from his own distributor, AutoPlus, instead of the national car-parts chains, sources told The Post.

AutoPlus, in turn, will buy its parts from Icahn-owned Federal-Mogul and other manufacturers. Icahn’s pitch is that the new arrangement will greatly increase the profits of the repair shops that install auto parts, sources said.

Icahn on Friday announced he will acquire Precision Auto Care’s 250 service locations. With that deal, Icahn Automotive Group said Friday it will now control more than 1,000 auto-repair shops.

Presently, national auto parts chains pay manufacturers a roughly 20 percent mark-up on their products. The retailers typically double the prices when selling to installers, a manufacturer told The Post.

Icahn, meanwhile, plans to sell parts to repair shops for much lower margins, sources said.

AutoZone and its peers presently operate at roughly 60 percent profit margins. It is possible Amazon could partner with Icahn and supply his stores, sources said.

Source: Bloomberg Pro Terminal

Jr Trader Ivan Ivanov

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