I should add day two for many of you. We had a great first day, and we thank all of those who were with us yesterday. Certainly, we appreciate you being with us to learn more about Genuine Parts Company. We want to add a welcome to the folks listening on our webcast who couldn't be with us today, but who we know are also going to benefit from this presentation. We want to tell you here in the room, we want to tell our folks on the webcast that we appreciate your support of Genuine Parts Company. It is really very important to us, we can't thank you enough for that. As we get started, as we do, we want to reference the safe harbor statement and ask you to consider these comments as you listen to our presentation today.
That goes to you as well as our folks on the webcast who have the presentation in front of them. As I mentioned yesterday, I think we had a great day. The store tour was great in our minds. More importantly, we hope that it was important to you and something that was informative and also enjoyable. We heard good things. It was super to be able to share the dual impact of our stores, both on the retail and do-it-for-me side and all the things we're doing in our stores to improve our market share and grow our businesses. As well, last night, it was super for our team to get out and have some time to meet each of you. You seemed to enjoy that interaction, I hope you found it quite worthwhile. Today, we think we have a great agenda for you.
This morning, you'll hear from our senior leadership team who will discuss their businesses and initiatives across our segments and in very important areas that combine all of our businesses in terms of procurement, digital, and technology. After those presentations, we've designated time for Q&A, we ask that you hold your questions until then. In the meantime, we're going to have a break area sometime around the 10:00 A.M. hour. We will adjourn around noon after that Q&A. From the noon to 12:45 time, we encourage you to get back outside, engage with the folks who have the displays representing each of our businesses. We saw a lot of you out there already this morning. Great examples of some of the products and services that we're providing to our customers and some of the innovation as well. This includes our displays in the lobby.
Enjoy the outdoor and the lobby displays when we have time outside of the room. With that, we'll have you out of here at 12:45 and hopefully very informed on all the great things going on at Genuine Parts Company. With that, let's get started.
Well, good morning, everybody. I'm Paul Donahue. I'm the CEO of GPC. I want to officially welcome everyone to our corporate headquarters. It's great to have you all on our turf. It's quite an assembly of industry experts here, and we're glad to have you here. Many of you asked last night why has GPC decided at this time to hold an investor day. We've been around 90 years. We're actually in our 91st year, and this is our very first investor day. The reason is our business model has changed dramatically over the last few years. We thought it really important as we've expanded around the globe. Largely, we're a North American-centric business for the majority of those 90-plus years. We made our first foray really internationally as we went to Asia Pac about six years ago.
Of course, our most recent expansion into Europe. Much has changed for GPC over the last five to six years. We thought the time was absolutely appropriate to give you all an update and give you all a look at the new GPC. Again, we're glad you're here. We appreciate you taking the time out of your busy schedules. Sid mentioned outside we've got some of our best and brightest from all of our business units. They're dying to talk to you all. They want to show off what they do. They want to talk about Motion. They want to talk about all of the automotive businesses that we have, as well as our Office Products business. Please, during the break, have a walk outside and chat with those folks. With that, let's go ahead and jump in if we could.
Today, we're going to talk really about four key objectives. If you leave here with a firm grasp on these four key objectives, then I think we've accomplished our goal. We want to give you meaningful insight into how we drive value in these three business segments, of which we often get asked, why three business segments? Why Industrial, Auto, and Office? We want to showcase our management team. Many of you had said in the past you get great access to Sid, to Carol, to myself. We're quite active, quite visible. What you don't often get to see is this whole group that we've got assembled that is going to get up here and talk about each of their businesses and what they do and how they drive value. We're going to update you on our progress towards both our operational as well as our financial goals.
Again, I think you'll leave here with a good feeling about our progress. Last but not least, we hope that you leave here with a much better understanding as how GPC really provides as a differentiated investment and one that is focused on maximizing our shareholder value. Let's dive in. We're going to begin with walking you through our multi-year journey to optimize our portfolio. Really, this is much of the activity that has taken place over the last five to six years and has kind of transformed GPC into a very North American-centric business into a global business. With that, if you go back into our 90-year history, GPC has really evolved into a service-oriented distribution business, and we serve three primary markets. Most of you guys in here, and gals, understand and know us as a U.S. automotive business.
Today, we are so much more than just U.S. automotive. It's still our flagship. It's still our core. As you can see, automotive today is 56% of our total business, but that includes North America. That also includes Europe as well as Asia Pacific. Our industrial business, which is under the brand Motion Industries, is now 34% of our business. That has largely been a North American business for many years. We'll talk a little bit later about our most recent investment into Asia Pacific with the Inenco business. Our business products group under the S.P. Richards brand is 10%. That's all North American based. As you look at our geographical spread, again, our global expansion over the past five years has now led us to having 26% of our business outside of North America and outside of the U.S.
Our structure just three years ago in 2016 looked like this. We had four business segments. We had 12 real operating units underneath those four key segments. Those 12 business units really operated independently of one another. I would tell you to take a little bit of maybe a shot at ourselves. Many of those business units operated in silos. We took a hard look at that business over the last few years and in our efforts to really optimize our portfolio. As we were presented with lots of global expansion opportunities, it was clear that our existing structure really warranted a comprehensive review, that led to what you're going to see here shortly, many of our strategic moves over the last few years.
If I take a look at many of those changes, much of which has occurred just over the past 24 months to really optimize our portfolio. Since 2017, we have had 45 acquisitions. Those 45 acquisitions have brought us an incremental new revenue, $3 billion. As we look at our acquisition strategy, there's really 2 different types that we look at. You've got what we have historically and traditionally done very, very well at GPC, that is bolt-on acquisitions. Those bolt-on acquisitions, generally either fill out a geographical void that we have, or they're more of a strategic product line adjacency, there's many, many examples of those bolt-ons in the last few years. We've also stepped out and done a couple of significant strategic acquisitions.
Strategic acquisitions would take the shape of our entree into Europe with Alliance Automotive Group and our most recent finalization of our acquisition in Australia of the Inenco business. AAG, we'll talk a good bit about that later, J.J. will be up here to talk a good bit about his business in Europe. It's a $2 billion market leader in Europe. Inenco, which we acquired 35% of back in 2017, is a $400 million MRO industrial distribution business, very similar to the Motion business here in North America, we'll talk more about that later. We've gone through optimizing our portfolio, a couple of the key steps that we've made. We've taken our Motion business and combined it with our electrical business. Many of you are familiar with our EIS business, fabrication, wiring cable, then a core electrical electrification business.
We rolled that up under Motion a couple of years ago to create what we believe is a larger and stronger industrial business. We've consolidated several operations that many of you probably never got visibility to. Underneath our NAPA business, we have, I guess, the best way to describe them is in-house distribution businesses that have one customer, and that's NAPA. Each of these operated independently. Again, names like Balkamp and Rayloc and Altrom, our heavy-duty truck business, all of those operated independently. They had full staffs. They had headquarters. What we did late last year, we formed the Automotive Supply Group, ASG, to create what we believe will be a much more efficient North American automotive supply chain. We've rolled those businesses together under one leader who is with us today.
In addition, the third move we made here recently was we divested our legacy business down in Mexico, which is Auto Todo. We run two businesses. We ran two businesses in Mexico, both under the brand Auto Todo. Of course, we took the NAPA model to Mexico a few years ago, running two models. We divested the Auto Todo business. As we look at our portfolio in 2019, here's what we look like. It's a much different business than just a few short years ago. We've streamlined a portfolio we've developed and now believe we have a strong, cohesive global automotive network. We've got a solid global industrial operation under the brands Motion and Inenco, and we've got a re-energized business products group. Rick Toppin will be up here shortly to talk about all the great things happening in that business.
The power of GPC and working as one. No more independent, siloed, focused businesses, all working as one to ultimately create value. We believe that this streamlined portfolio of automotive, industrial, and business product distribution operations really positions GPC for strong future growth and also providing us with strong global competitive advantages, which would include the following. Global presence and brand strength. When we look at our presence now around the world, we are the largest global automotive aftermarket business, and we now have the largest global industrial business. That gives us a powerful global presence. We've got great brands. The NAPA brand, which we are now taking around the world, primarily was a North American brand. We've now introduced the NAPA brand in Australia, and Rob will be up here later to talk about that initiative in Australia and New Zealand.
We're also going to take the NAPA brand to Europe, as Jean-Jacques will talk a little bit later. We've got great brands, and we've got great brand strength around the world. We believe that that brand strength is going to give us really market-leading business in each of the countries in which we operate. Financial strength. Our strong balance sheet, our conservative nature as a business over the past 90 years gives us the wherewithal to really invest back in growth opportunities in each of those three segments, but also in each of the geographical regions that we continue to serve, thereby continuing to build on our market leading positions in those markets. Buying power.
As we have expanded around the globe, it has enhanced our global buying power. Our key suppliers, people like Gates and Bosch and Schaeffler, SKF, 3M, these suppliers are all global, and they supply not only our automotive business but also our industrial business. That global buying power gives us scale with these large multinational global suppliers. At the end of the day, we believe that scale will give us an advantage in the various markets that we continue to serve. Finally, as we leverage our common distribution processes across the GPC platform, we'll share talent. Many of you who were in our store yesterday had a chance to meet Cameron Richardson. It's a great example. We brought Cameron over from Australia, who is a terrific practices.
We share technology, we share systems, we share transportation, freight, ocean freight services, and most recently, we've gone to the next level, which is sharing facilities. You'll hear us talk more and more about how can we potentially leverage facilities as we expand and potentially run multiple businesses out of one facility. Common distribution, you'll hear more and more from us. These three distribution segments, we believe, really gives us competitive advantages and really reflect what we think are the powerful combination of three terrific segments. They provide a strong foundation, and also they provide what we believe is a really bright future for Genuine Parts Company. This strong foundation that we've built over the last few years and over the last 90 years has really propelled what we believe is a pretty strong run, which is recapped here for you on this slide.
This slide shows you the past 10 years. What you see here is significant sales growth over the last 10 years, 7% compounded annual growth in sales over the past decade. EPS has grown 10% in that same 10-year stretch. In 2019, at the rate we're progressing right now, we believe we'll hit the $20 billion mark for the first time in our company's history. That will have doubled our revenues from 10 years ago. If you look at the earnings growth side, we're accelerating at an even faster pace, and our earnings will more than double in that same 10-year span. If you look over the last 10 years, they really reflect a really strong and long track record of success at Genuine Parts Company, both on the sales side and on the earnings growth. This is a great slide.
86 of 91 years, GPC has increased our sales. GPC was founded in 1928. It's a little history here for you folks. 1928. The Great Recession hit in 1929, ran basically for a decade. We entered World War II. That was another six-year stretch, all the way into 1945. Recessions after recession, you go all the way to the great financial crisis of 2008. GPC has been there increasing sales 86 of 91 years. Then on the profit side, 75 of those 91 years, we've grown our profits. Then, of course, a mark that we're very proud of is our dividend record of 63 consecutive years of increasing our dividend. We know for a lot of you out here and a lot of our shareholder base, this is an incredibly important factor when it comes to owning GPC.
As we look at our drive to our 100-year mark, which is out there a little bit on the horizon, but it's coming at us, we want to bring up all of our business leaders from around the world. Each of them will give you a brief update on their business. Please jot down questions, and we'll hold a Q&A session at the end. They'll share their stories. They'll share their strategy as to how they're going to grow their business, whether it be industrial, whether it be in Australia, whether it be in Europe, whether it be in Canada. They got great stories to tell, and what we hope you take away from their presentations is really the awesome power of GPC. Ultimately, the goal is to continue to drive shareholder value in our drive to the next 100 years.
With that, I'm going to bring up our North American team. They're going to kick off with a video, and I'll be back up a little bit later. Thank you. All right. Good morning.
My name is Scott Sonnemaker. I'm the Group President for North American Auto. I'm going to be bringing up, in just a few minutes, Kevin Herron, who is our President of U.S. Automotive, or NAPA U.S., and Alain Masse, who is our President of UAP, and NAPA and Heavy Duty Canada. We opened with that commercial. I hope you maybe have seen that already. If you're a fan of MotorTrend television, it's on there a lot, and other channels. I opened with that because we wanted to figuratively bring the customer into the room. If you saw in that commercial, there were three distinct customers, the do-it-yourself customer, the do-it-for-me customer, and the NAPA AutoCare that's actually our customer hanging those parts.
We wanted to do that, and we do it a lot in our meetings because we know that it all kind of starts and ends with that customer making that decision to buy from NAPA. We wanted to figuratively bring them into the room today as we got started. Let me get to the next one there. Some of you know that from our conversations last night, that I just recently came to GPC. I'm four months with GPC after 23 years with Sysco . My last two roles at Sysco, I was a Chief Customer Officer and Senior VP for International Operations.
Although I do see similarities and perhaps some opportunities from my experience, I will tell you that I'm mostly focused, I have been focused for the last four months, I will continue to be focused from learning from the great leaders from GPC in this room, the leaders that are out in our operations, the owners, the operators, our customers. I'll continue to just focus on learning the business and really making sure that I have a fundamental understanding of the business. I will tell you, in the first two quarters, I've been incredibly impressed by the brand, the business model, and the passion of all the associates involved in the NAPA business, and I'm honored to be part of this great team. Now let's take a quick look at the history.
I was given some of the easy topics to go over. Let's take a quick look at our history. NAPA was founded all the way over here, as Paul mentioned, 94 years ago. Coincidentally, UAP Inc. was founded a year later in Canada. The next big bullet point I wanted to mention was NAPA AutoCare. You're gonna hear a lot about AutoCare. We think it's an incredible value add that we have and a leverage into the marketplace. 35 years ago, the first independent NAPA AutoCare brand was established. Now it's by far the largest branded auto service business worldwide. 1989, we introduced NAPA TRACS. It seems like a long time ago to talk about an innovative shop management program, we have iterated and reiterated this program for years.
We still believe today it is an industry-leading application that helps our customers be more successful. We will continue to improve that. The next one I want to bring up is NAPA Expo. You see this NAPA Expo 2015. That was the last one we did. It's a huge event. In the 2015 event, there were 16,000 participants, which is basically the largest gathering of owner-operators, our NAPA Auto Parts owners, and experts from around the industry, and consultants, et cetera, to really improve how our customers run their business. It's a great opportunity for us to showcase our products and our value-added services in a four-day kind of concentrated setting. What it really is also is it's an 18-month-long customer journey with us.
Our operators in the field today are getting all geared up and running promotions and supporting their customers for NAPA Expo 2020, which will be next spring, where we expect over 20,000 participants. All those customers are already in kind of the marketing, promotional, and training, and educational process that is NAPA Expo, and we're very proud of that event. In 2019, we had two major milestones that I wanted to share. First one, Paul mentioned, and that was the formation of the Automotive Supply Group, ASG, under Bill Westerman, who is in the back and is available for questions as you do it. Tremendous opportunity to get some synergies to leverage one management team into multiple businesses, and they pulled it off without a hitch. We've got some tremendous opportunities in kind of our captive manufacturing and distribution arm of our business.
The last one I wanted to mention on the history is Sanel. It is one example, but it is a really strong example of what we are constantly looking for in the independent space. The Sanel Group, for those of you that are from the Northeast, is a 43-store independent parts supply company, one of the largest independents out there, and they have moved over to the NAPA family effective this spring. We are in the process of kind of doing that whole turnover. Great leaders there, and they are really excited to be part of the NAPA family. The reason I bring that up is because it is a good reminder that 40% of the market is still with the independents like us. We do believe that we have the best solution for a regional player that wants a national scale in procurement, in branding and marketing, and in technology.
That is our pipeline. That brings me to a major point of differentiation between us and our major national competitors, and that is the independent owner model in NAPA. Again, even though I am brand new to the automotive aftermarket business space, I do come from a background of gaining market share in a very fragmented industry by acquisition, JV, and kind of pulling the market together, and organic growth, of course. I am very confident in the strategic opportunities that that highly fragmented market in a roll-up approach brings. From the chart, you can see how do we go to market. Most of you know this, but it is a good reminder. Of our 6,600 stores, we go to market with a little over 1,300 company-owned stores and 5,300 independent stores.
Further look at those independents, over 50% of those are with owners that have multiple stores, all the way up to the very top group have an average of 13 stores. It is continuing to consolidate within our owners, and I will touch on that a little bit later. Over the last four months, I have been very fortunate to meet with a lot of owners. Our owner group in Vegas, where we had hundreds of owners there, and then I have done one-on-ones with about six or seven of our very key owner groups. One of them, Joe Hansberry, who runs Northern Illinois, about 50 stores that are approaching $100 million in revenues, I asked him, "What is the leverage? What is the real leverage? What is the secret sauce behind the owner operator model?" He used this phrase of bringing Wall Street to Main Street.
I thought it resonated with me because these are entrepreneurs. They are involved in their community. They are deeply involved in their business. They have their capital invested, and they are providing their sweat equity in running that business. In thousands of mid-tier markets or suburban markets or mid-tier markets across the U.S., this is a very strong operating model. This model also provides for succession planning for the smaller owners that may have one or two stores and do not have family members growing up in the business, where the larger owners will acquire those, and also underperforming stores to be acquired by those. In the larger metro markets, we operate our company-owned stores, and we have identified many markets where we believe store expansion is available at the right pace.
We believe this model works in key metro markets and the mid-tier markets. We're focused on executing this model very, very well. As examples of that, we have a very disciplined approach to opening company stores. The store you all or a lot of you saw yesterday is the model of why we believe the right stores, the right place to open with the right inventory, et cetera, training, can really perform. Secondly, we're working on supply chain opportunities to make sure that as we get product closer to market, but also still control our DC and our store operations costs. Finally, we have a strategic approach to further owner consolidation.
We believe that great operators will continue to have opportunities. We do it through agreements, through financing programs, and we look for more compliance on key areas of operations, like product stocked or national promotions, or even store opening hours. Owners and prospective independents like this model because it allows them to remain those entrepreneurs that they grew up being and their business owners, but it provides the purchasing power along with the national NAPA brand recognition for both the do-it-yourself and do-it-for-me customers. Speaking of the brand, Paul mentioned how strong this brand is. As a newbie to the business, I right away gravitated to that. It's a brand that I've known since I was working on my grandfather's dairy farm, going to NAPA stores in Northern Illinois, surprisingly. This brand is incredibly powerful as we look into it.
The brand is the leading brand with installers. It's the most recognized brand with installers, and it has value all the way along the chain. It has value as a parts supplier. The installer customer, whether it's independent, a NAPA AutoCare, a national account, or a fleet customer, they all know us and they trust us to deliver quality parts and service. It has a value in the brand for the quality of the parts themselves. It has the value of that OE quality national brand. We utilize those key suppliers and relationships and excellent customer service, but we also provide an unparalleled national warranty coverage support. As you're out talking to some of the AutoCare owners that are out in the lobby, they'll talk about that warranty service and how important it is. Finally, for the consumer.
You see, we put the Consumer Reports logo up here for a reason. In the February 2019 edition of Consumer Reports, NAPA AutoCare was ranked top tier of all auto service places available in the U.S. That's OE dealers, independent shops. We're right in that top tier with that 87 score on price or overall value of the service. That NAPA AutoCare brand is extremely strong. The consumer also knows that when they go get NAPA parts in NAPA AutoCare Centers, that they get a branded part with that national warranty that they can utilize across North America. Only company that can do it, Canada, U.S. as well. The brand is one of our most valuable assets. It's a tremendous upside in growing share of wallet growth. We can call on and close new customers.
We have tremendous opportunity to just share a wallet with who we call on today by further bundling our services and then really leaning on that NAPA know-how of all of our employees that we're really known for. As you can tell, I'm pretty passionate about this already. After four months, I already bleed NAPA blue. Tremendous opportunity. Next, I'd like to very briefly share with you an operating model. This isn't about creating a whole bunch of new initiatives. We have tremendous initiatives that are in flight, but we're trying to be a little more structured in how we view each initiative, what the impact will be, how we should stage it, how we should roll it out. We kind of have this operating model that we're looking at for these various initiatives. All initiatives have to be validated against the customer experience. Will it enrich the customer experience?
Is there a potential downside? When should we do this? How should we do this to minimize impact? Mostly, it's about improving that customer experience and wherever they choose to shop, whatever channel they choose to shop in. Initiatives will be staged and executed with field-ready tools. That's the role of a corporate office, is to make sure that our thousands of associates in the field can actually execute this in a way that doesn't disrupt their business. It's really designed around four main areas of impact on the business. Grow market share, whether it's share of wallet or new customers, wholesale or retail. Drive gross margin improvement. Two main buckets there is through strategic sourcing with Scott Leprohon's group and Gary Dunwell working together or pricing models and mix to improve gross margin. Improve our supply chain.
That's from either reducing costs or increasing service to drive share, invest in warehouse automation, or reduce our SG&A costs, all of which will drive our cost basis lower. Finally, the last one is around new market expansion. We want to make sure we're looking at adjacencies the right way, product category adjacencies or customer mix. For example, heavy duty is a tremendous opportunity. You're going to hear from Alain in a little bit about heavy duty. Paint and body, tools and equipment. We have opportunities in various segments. The goal is to develop strategies, to pilot them when necessary, and then to violently execute them across the enterprise to drive maximum results. That's the goal of the operating model. I've given you a little bit of our background and foundation moving forward.
I'm going to turn it over to Kevin and Alain to talk about what's really the strategy that's driving the business today. Kevin?
Thanks, Scott. I'm good. Thank you. Can we move the slide along, please? Thank you. We continue to be excited about the growth potential in both the U.S. and Canadian marketplaces. In the U.S., our 7% market share will be fueled through share-of-wallet initiatives in the Do It For Me segment that continue to roll out of our retail impact stores. I hope you all enjoyed the visit to Merchants Walk yesterday and got a feel for what we've done across our company store network.
Growing our NAPA store count through strategic backfills like Sanel that Scott referenced, a 100-year-old company, fourth generation up in New England, who recently and are in the process of changing over to NAPA, both on acquisitions like what we just completed in Cape Cod with Orleans Automotive, finally, the opening of new corporate and independent stores with our corporate stores really focused in the metropolitan markets. The same opportunities exist in the Canadian marketplace, where Alain and his team currently enjoy a 17% market-leading share. We have the same opportunities for growing share of wallet with the Do It For Me, same opportunities with new store opportunities, changeovers and greenfields, also acquisitions. Alain and the team recently announced Avenue Motor Works in Toronto as an acquisition for our Canadian team.
North American model, very similar, whether you're in Canada or the U.S., 80% Do It For Me in the U.S., with 20% in retail. The Canadians, a little stronger on the Do It For Me at 85% with 15% retail. We're continuing to be real excited about growing our retail business, the impact store model you saw yesterday at Merchants Walk, but we also are staying focused on growing on our Do It For Me segment. As Scott referenced, we're market leaders in the Do It For Me piece, and we'll continue to stay focused on growing our share of wallet in this highly fragmented business. Alain and I are excited to discuss four of our key growth categories over the next few minutes. I want to give you an update on our supply chain process.
We all know inventory is the key to success in our business. The map in front of you shows our 70 distribution centers, those are the red dots, that service our 6,600 corporate stores across North America. We believe that those 70 distribution centers, along with our 80 hub stores in the U.S., give us a market-leading edge in servicing the customer and have an inventory farthest down the supply chain to take care of our customers' needs. We'll talk a little bit about some of our innovations in the supply chain end of things. Our 70 automotive distribution centers across the North America, we're currently utilizing robotics in our pace in Utah automotive supply branch, our distribution center, excuse me, rolling out goods to person in our Cambridge, Ontario distribution center, which will actually be a multi-business center for us.
Now, Alain and I are excited to talk about our four key growth segments for growing our business.
Thank you, Kevin. I will be presenting two of our top growth initiatives, specifically, as Kevin mentioned. The first one that I'm going to cover is our heavy duty business. In Canada, we have a very specialized team focused in exclusively on the heavy duty business, and we continue to grow our sales and gain market share. In the U.S., we have a very large business on the heavy duty side, and we continue to do very well, but we have much more potential for growth going forward. We know that the market fundamentals are positive. The market in North America on the heavy duty side is going to be growing on average 3% over the next five years.
Now, if we focus more specifically in on Canada, we started on the heavy duty side over 50 years ago when we opened our first Traction store in Montreal, Quebec, actually in 1967. We have, over those years, built a very successful business. In fact, in Canada, we are the clear number one aftermarket distributor in the country. We cover the country from coast to coast. In fact, of all the country, we're the only national player, the only one that covers the country from coast to coast. We are a true business partner for our customers. We are a one-stop shop for the small, all the way up to the large national fleets, class 6, 7, or 8 commercial vehicles. We have the best team in the industry, very specialized, knowledgeable, experienced, and they really care about our customers.
Now let me show you our HD presence across the country. As you can see on this map, we have a very large presence across all of North America. In the U.S., leveraging our Canadian business model, we started back in 2007. Under several banners, we have, over the years, been able to grow our business significantly. In fact, we're pretty excited. We do over $800 million of business in the U.S. on the heavy-duty side, with a lot of upside potential. Bill Westerman, Kevin Herron, and the rest of the team are focused on aggressively growing our share on the heavy-duty side in the U.S. Now, let's look at another one of our growth opportunities, more specifically, our NAPA AutoCare and AutoPro service centers. They're a very important part of our business.
They're important, and they're also a very important organic growth opportunity as we continue to grow our share of wallet with each individual member. It's a network that started over 35 years ago. We're talking about two great brands in two great countries. NAPA AutoCare and NAPA AUTOPRO, it's all about value and trust with the consumer. Talking about those consumers, we help drive those consumers right into those locations. We also help drive business into our NAPA Auto Parts stores. Our members are the most loyal customers that we have. As with our independent NAPA stores, as Scott was talking about before, our NAPA AUTOPRO and AutoCare owners are part of their communities, and that's an additional reason why consumers trust them. Looking at this map, it's pretty obvious that we have North American consumers covered. At over 19,000 service locations, we literally dwarf the competition.
In fact, NAPA AutoCare and NAPA AUTOPRO is the largest network in the aftermarket, not only in North America, but the world. I mentioned that they are our most loyal customers. Well, they are because they know that we're much more than just a simple parts distributor. We're their business partner. We provide them with incredible services, from leasehold improvement programs, consumer promotions, to online, technical, and even business training. We're there by their side. We are the best solution for the independent service centers to grow their sales and be even more relevant in the future. There simply is no better program, and our members, our service centers, that are part of the NAPA AutoCare and NAPA AUTOPRO network, they understand that, and they value that. Thank you. Kevin.
Thanks, Alain.
You're good.
I want to talk about our major account business. This is our largest segment, in our do-it-for-me piece. We break this down into 5 different categories: government, fleet, integrated business, OE dealers, national brands like Firestone and Goodyear, regional accounts like Fountain Tire in Canada, and then our affiliated brands. We're building, and have built, strategic plans to grow each one of these 5 segments moving forward, and what's key about our growth is the 3 ways that we can service these customers. We're all about servicing what the customer needs. First is your traditional hotshot. From our parts store right to the customer's place of business. The second is our DC Direct program, which allows us to fill stock orders out of our distribution centers direct to major account customers. The final piece is our on-site stores, where we take over the purchasing for an organization.
We currently have on-site stores in customers like Delta Air Lines, Southwest Airlines, where our team was just awarded the Value Business Partner Award at the recent National Vendor Summit. We have two locations in Walt Disney World in Orlando. Finally, cities of New York, cities of Chicago, Sacramento, and Toronto, and many others have our on-site store facilities in their locations. We continue to be keen about this and also very excited about growing our ever-impressive major account business. The final is our retail business. Again, I certainly hope you enjoyed our visit to Merchants Walk yesterday. You probably heard Cameron talk about the keys to winning, and it's the 5 attributes that you see up on the stage. Physical store is obviously important. We're very pleased with what we see in the Merchants Walk-type location. Communication and marketing. How do we interact with the customer?
How do we communicate on a regular basis with the customer, whether it's our over 10 million NAPA Rewards members or it's traditional communication. Training our store people, not only to service our retail customers, but our wholesale customers. Value, making sure we are competitive in the marketplace. Finally, a full range to service the needs of our customers. We continue to be pleased with the results in our company stores, with the first round of upgrades now entering year three. We see double-digit growth in the first year and then 3%-5% growth above and beyond the rest of our network as we move forward.
We are now rolling this out to our independent owners and look for the same success in their stores as we had with our company stores. As Scott talked about, the customer always has to be at the top of mind in what we do, and our plans will always start with the needs of the customer. Again, on the do-it-for-me side, we're really pleased with our impact store model and the success we've seen in our company store network. On the do-it-for-me side, we continue to invest in our digital experience for the customer. NAPA TRACS, our on-site business management program, again, that Scott mentioned, that's 30 years old and continues to evolve to service the needs of the customers. NAPA PROLink, where we are connected to our customers from an online experience.
NAPA Delivery Management, again, many of you saw that yesterday, where we can track our deliveries to our customers, just as importantly, our customers can track their deliveries and know when those parts will show up at their place of business. Finally, NAPA Express, our virtual supply chain online network that allows us to see inventory all the way through our distribution centers and our manufacturers for our stores and our customers. These initiatives are all key to growing our important Do It For Me business. Again, with the customer's needs at the top of our thought process when building all of our strategies. Scott, I'll turn it back over to you to close it up for North America.
Okay. Thank you, Kevin and Alain. Hopefully, you've got an understanding of some of our key areas for growth, now that they've kind of gone through the growth initiatives and strategies to enrich that customer's experience. I have a few kind of clean up around some future automotive trends, just to make sure that you understand our approach and what we're doing to compete in this ever-changing industry. There's seven automotive trends that seem to get the most attention out there. I'm sure these are all things that you track or are aware of. New vehicle sales, obviously, vehicle mix, the aging vehicle population, battery and electric vehicles, telematics and data, autonomous vehicles, and the impact of ride-share models on miles driven.
There's various leaders across GPC that regularly track these or are aligned with some industry groups, that are constantly working on developing our strategy to make sure we stay ahead of these changes and these trends. There's two I'd like to call out specifically because they've garnered a lot of attention over the last year or so, that's ride-sharing and the impact of hybrid and EVs. Both of these two have something in common. The overall impact to the industry today is relatively small, but the potential for dramatic change in onset over the next 10 years is very large. We want to make sure that we're on top of those, and I want to share with you a little bit. Ride-sharing today, by most estimates, accounts for maybe 1%-2% of total miles driven in the U.S.
Of the 3.2 trillion miles driven in the U.S., 1%-2%. The reality is there are 4 million plus part-time or full-time ride-share drivers that are going to need their vehicle serviced. As we look ahead and consider the changing trends associated with this customer driving preferences, such as ride-sharing, we're exploring the possibility of partnerships with leading players in this space, Lyft, as an example. That brings me to EVs. As you can see from the charts here, hybrids and EVs remains really relatively low at 2% of the total vehicles, but it obviously is growing very fast. What does that mean for NAPA? The first thing is the internal combustion engine is going to be the largest component. It's 98% of the total vehicle fleet today, and actually it's projected to grow by another 20 million vehicles through 2030.
This is a huge positive for the aftermarket. Biggest and still growing. EVs and hybrids, as you can see, although it's relatively small today, it will end up at 2030 at least 10% of the total vehicles purchased will be EVs or hybrids. As you can see, when you go outside, you'll see three different vehicles on display. All the same year, all 3 categories of vehicles. We have lots of products to sell to any of those vehicles. We don't want to just stop there. We also want to lead in this space as it grows. We've established a category group in our merchandising team that are focused on EV and hybrid-specific aftermarket parts to make sure that we bring those items to market faster than the competition and stay ahead of the demand.
Innovation in this industry is kind of the norm, and we have a strong history of innovation in the aftermarket parts space. If you allow me to use this as an example, let's just talk about the last mile of delivery in the automotive space. All the way to your left here, you'll see a little red truck. In 1936, here in Atlanta, parts were being delivered by motorcycles, and there were a lot of accidents on motorcycles. Someone at GPC had the innovative idea of creating the little red truck out of an American Bantam coupe. It suddenly became a little red truck. That was actually, for those of you who are Jeep fans out there or Jeep owners, that was actually the prototype for the Jeep, that the army came down, viewed, copied, and decided that they needed a lot of these vehicles.
That was innovation in 1936. Today, we're going to be delivering in all kind of methodologies that last mile. Here's an example of a hybrid auto parts delivery vehicle that's in use today. Finally, what's the future hold? Well, if you see that logo, that NAPA Auto Parts logo on that drone, we didn't Photoshop that on there. That's a sticker of an actual drone delivery last fall in Canada that delivered auto parts across a river in northern Ontario. Took a 10-minute flight that would've taken over two hours to deliver by land. So it's not far-fetched to believe that a few years from now, we may be up here talking to you about stocking parts for drones in some of our stores, or delivering by drones. I think it's certainly a possibility in the future.
As you can see, we're very confident in our model in North American Auto, our supply chain network, and our value proposition for both the wholesale and the retail customer, and we're motivated to constantly innovate and improve that value proposition. We're excited about our ability to serve these customers with the highest quality parts and service available in North America, and continue to deliver for our shareholders, both on market share gains and on profitability. Thank you for your time and your support and your attention, and at this point, I'm going to turn it over to Jean-Jacques. Thank you.
Good morning. It's a great pleasure for me to speak to you about Alliance Automotive Group, a wonderful company that GPC acquired at the end of 2017, and that gave it access to the European market. My friend Alistair, who is here today, and myself, we founded Alliance Automotive Group 30 years ago in 1989. What we did back then was to acquire a tiny mom-and-pop store in a very small town in the west of France. From there on, we started embarking on a growth journey, primarily through acquisitions. The market was already, back in those days, growing at a relatively low pace. We also found that there were somehow an over-distribution model in place. Rather than opening greenfield sites, it became very apparent to us that the best way to grow would be through acquisitions.
We basically developed a sort of two-pronged model, very similar to the NAPA model in North America, with company-owned stores that we acquired, and also independents under common banners. Through the different acquisitions that we made over the years, we entered new markets, new countries. First U.K., then Germany, Poland, and very recently, the Benelux, so Belgium and the Netherlands. When I say very recently, it really is recently because we actually closed that deal an hour ago. Which is an important deal for AAG and for GPC because we've added $350 million worth of revenues to our group. That means that today our total revenues is, including the new acquisition, will be in the vicinity of €2.6 billion including direct sales to independent stores. Obviously, the fact that we are now part of the GPC family is bringing a lot of benefits to us.
Greater leverage with global suppliers is probably the most important one, but also a whole array of expertise in different fields such as IT, logistics, and also, obviously, we continue to have access to capital to fund further acquisitions. Today, we operate through 2,300 stores, 600 of which are company-owned, and we're the number 2 player in Europe. The number 1 player, and I'll talk a little bit about competition later on, is LKQ, a company that most of you know, with the peculiarity that LKQ is actually only active in our industry in Europe since here in the U.S. they're in a different industry. As you can see here, these are the countries where we are present, and it leaves open quite a number of other countries where we're not currently operating.
In terms of the breakdown of our revenues, the majority is still in France with 40%, followed by the U.K. with 31%. In Germany, as you can see here, which is the largest market in Europe, we only have 15% of our revenues, which obviously offers a tremendous amount of opportunities in terms of further growth and further consolidation. We're very excited about that. In Poland, we only have a foothold, and then obviously Belgium and the Netherlands as of today. We actually corrected the slide about an hour ago. How do we operate? Well, we operate through 71 distribution centers, some national, some regional. You can see here the breakdown amongst countries. As I said, 2,300 outlets and 600 of them being company-owned. We deliver to around about 40,000 garages through a model, and I apologize for this slide, which is a little crowded.
Basically, it is a model that is, like I said before, that is very similar to the NAPA model in North America. What should be remembered from this slide here is that around about, as you can see on the right-hand side of the slide, around about 70% of our sales are from our company-owned stores to primarily mechanics, and the remaining 30% are sales to our independents. Going back to the sales to mechanics from our company-owned stores, you also see that there is a small proportion of DIY business. It is important here to note that the reason why this is so small is because the DIY market in Europe is very small. There is no such thing as this sort of culture that exists here in North America to tinker around with your car during weekends.
There are a number of reasons for that, some of them being environmental, because we are not allowed, for example, to wash our car in our garden on the street, to give you an example. So DIY is really a very small component of the market in Europe. AAG is also a member of a very large organization called GROUPAUTO International. What GROUPAUTO International is, it is basically, we call it a trading group. It is actually a buying group made of organizations similar to AAG, covering 70 countries, and negotiating additional terms with suppliers, usually, obviously, global suppliers. It does not only do that. GAI is also a place where marketing programs are developed, similar as the NAPA AutoCare Centers programs. It is also a place where strategic decisions are made about our industry as a whole.
Finally, last but not least, it is also a reservoir of future acquisitions because it gives us access to a lot of our colleagues in other countries around the world. Some words about the European market. As you can see on this slide here, we estimate the market in Europe. When I talk about Europe, I am talking about the 28 countries that are still making the European Union. We do not know for how long, but in any way, we are talking about the U.K. included. 300 million vehicles in the European car park. As you can see here, the markets that we are operating in cover around about 56% of the car park. Obviously, we do not have the same market share in every country as you saw before, but at least we have a presence that covers 56% of the car park.
That means that there is 44% of the car park where we have absolutely no presence, and that gives, again, an idea of the potential for further development and further growth. What is interesting to know also about the market in Europe is that the logistics or the supply chain organized by the car dealers is actually quite large. It is about 42% of the market. I think here in North America, it is probably less than 20%. In Europe, historically, car dealers have commanded a very large share of the market. This 42% is actually a number that has decreased over the past 10 years. We have actually gained market share. When I say we, the market of independents, we have gained market share against the car dealers over the past 10 years.
More recently, they have tried to recoup some of the lost ground. They're actually quite aggressive right now, but they are still only 42%. IAM, what we call IAM, independent aftermarket, accounts for about 40%. The remainder is with chains of fast fit repairs that have their own logistics capabilities. Again, some DIY, which as I said, is quite marginal. In terms of competition, I mentioned that the leader is LKQ, with about EUR 4.5 billion of turnover in a relatively large number of countries. We are number two with EUR 2.6 billion, and then you have another three mid-sized businesses. What's interesting here is that when you look at the first five major players in Europe, and you compare that to the more or less EUR 70 billion size of the market, it means that the first five players only command around about 15% of the market.
As you can see here, the other players start becoming much smaller. If you go a little further down below the slide, you'll see that these become really small companies. It gives you an idea of how fragmented this market still is. We talk a lot about consolidation. We've been talking about consolidation for the past 10 years in Europe, yet we're still in a very fragmented market. Consolidation has a lot of mileage to go further going forward. Major trends in the market. I think there's one major trend, which I mentioned already, which is consolidation. It's an opportunity for us. It is something that we look at very carefully. We are looking at every opportunity to not only increase our market share in the countries we're already present in, but also look at countries where we're not present currently.
That is the major trend. There are certain headwinds, should I say, or concerns or challenges. I mentioned the willingness of car manufacturers, car dealers, to recoup some of the lost market share. We have to be very careful about that. Obviously, car-generated data is an important element. I think it was alluded to already by Scott, because obviously, those trends are common to the whole world. We are lobbying extensively in Brussels with the European Commission to make sure that the independents will continue to have access to all the data that are being produced by new cars. We're quite confident, by the way, because the European Commission does not want to let the car manufacturers actually enjoy a monopoly situation. Digitization.
Customers are looking for digital interfaces for all their aftermarket services. We obviously have a lot of people working on that and systems responding to those needs. How do we grow? How do we grow AAG? Well, as I mentioned before, we've grown through acquisitions, but we also grow through like-for-like initiatives. Let me start with the like-for-like initiatives. We all know that in our industry, what matters more than anything is the level of stock that is available to our customers and also the speed of delivery. It is becoming common around the world that if you want to make a sale, you need to be able to deliver within 20 to 30 minutes. That is something that is hard for us, but it's even harder for our competitors and certainly for, like I said, the car manufacturers, let alone internet players.
This is our strength, and that is what we make sure we continue to improve going forward. We also have to have exceptional levels of customer service and support, which is why within our stores, we have a very high level of service capabilities that we offer to our customers in terms of technical training, customer call centers, showrooms with store demonstrations. This is really what makes us our customers' best friend in a way on a daily basis. This is how we drive like-for-like growth. Obviously, as I said, I'm sorry, I forgot to mention also the fact that pretty much like in North America with the NAPA AutoCare Center, we develop branded garage networks. Brand awareness makes those garages buy the vast majority of their needs from our stores.
Not only do we give them a brand, we also organize specific sales promotions. We give them our IT systems. We give them training. These guys really become part of our ecosystem, if you will. Now, moving to acquisitions. Acquisitions really is part of the DNA of AAG. Over the course of the past 30 years, we made about 200 acquisitions. We have M&A teams in each country doing nothing but prepare acquisitions or integrating acquisitions post-deals. We separate our acquisitions in 2 major types, what we call the tuck-in or the bolt-on acquisitions. Those are typically our independent members. These guys have been working with us forever. We know them by heart. We know the owners. We know the family of the owners.
When they want to sell their business, we are not only the buyer of choice, we're the only potential buyer for them, which makes the negotiation and the discussion quite easy. Obviously, we have more strategic acquisitions in adjacent product groups. For example, in France, we have started selling secondhand parts because there are some legal reasons in France why we thought that was an interesting opportunity. Or obviously, when we enter a new country, such as the acquisition we just made in Holland, that is what we call strategic acquisitions. All together, as you can see here, over the past four years, we've acquired about EUR 300 million-EUR 350 million worth of revenues per year. 2019 will be the same with around about 25-30 acquisitions per year. That's two acquisitions per month.
It gives you an idea of how skilled and how used we are with making acquisitions. Being part of GPC offers a lot of opportunities. Obviously, further consolidation is one of them. As I said before, being part of such a large organization and having access to further capital for growth is an important element. We also believe that there are new markets that we should and will want to enter going forward. Obviously, the NAPA brand is something that is of invaluable wealth for us going forward. Historically, AAG has never been very good in private label. NAPA is a fantastic private label, we're in the process of introducing the NAPA brand in the European market, we're really excited about that. Integrated logistics. Obviously, with all those acquisitions, there's a lot of legacy systems.
We think that there are areas where we can probably streamline our logistics going forward. All in all, we're very excited about all those opportunities, but more importantly, being the founder of this company, it's a little bit of a baby for me. To know that this baby has found a home going forward, that we'll be continuing to develop that business for years to come is really something that is particularly important for me. We're really confident that Alliance Automotive Group will continue to grow going forward. I thank you for your attention. It's to you.
Well, thank you. Good morning, everybody. My name is Rob Cameron. I'm the Managing Director and CEO of our Asia Pacific operation. I'm really delighted to be here this morning, give you a little bit of insight into our business on behalf of our 6,000 team members down under. At Repco, we are the clear market leader. In fact, you could suggest that we are the pioneers of the automotive aftermarket in Australia and New Zealand. We commenced operation in 1922 with our Repco brand. This year marks our 97th year of operation. Much like Genuine Parts Company, Paul, we've got a heck of a party developing in 2022 for our 100th year. Repco is an icon in our industry. It's got a storied history. We were vehicle manufacturers, we were parts manufacturers, and obviously, we did a heck of a lot of parts distribution as well.
We developed Formula One racing engines back in 1966 and 1967. A vehicle of our making, our racing engine, actually won the Formula One World Drivers' Championship and the Formula One World Constructors' Championship. We've really got a storied history throughout Australia and New Zealand. Our business distributes parts, tools, equipment, accessories, and digital solutions to both commercial customers, which makes up about 70% of our business, and also to retail customers, which make up 30% of our organization's revenue. Much like Genuine Parts Company, we've got a strong track record of creating shareholder value by consistent revenue growth, combined with increasing our return on capital. We go to market through three main channels. Our Repco business is our largest business with 420 stores. We also have a number of specialist and commercial-focused brands that account for about 130 locations.
In fact, these businesses, and I'll talk a little bit about it later, are actually converging to form a NAPA brand in Australia, which we're excited about. Third channel to market is our motorcycle accessories group, our two-wheel division. These sales channels are supported by a network of 12 distribution centers that cover the country. As you can see there, logistics and that last mile in Australia and New Zealand is actually a huge challenge. We've got the land mass roughly the size of the U.S., but our population density is actually 12 times less than the U.S. So it's quite a challenge. That lack of population density that we have has driven the dual-format model of our largest business, Repco. You can see some images on the screen there of a typical Repco branch. Repco represents around 70% of our group's revenue.
Within those Repco stores, the split commercial is around 55% of our business and retail is the remaining 45%. Repco focuses on automotive parts, tools, and accessories for passenger motor vehicles. We actually think that Repco has a distinct competitive advantage over our major competitors. Supercheap Auto, and that is actually their real name, Supercheap Auto, they're a retail business, and Burson, who are a commercial business. It's because we service both markets, the DIY and the DIFM, it means that within our store, we've got all five of the major product categories that consumers purchase from an auto store. We're the only auto retailer in Australia and New Zealand which has a comprehensive range of parts in store. This is really important because we appeal to that DIY customer, that car enthusiast customer.
The reason why that's important is because those shoppers have a propensity to shop more often in a store, around twice as often as other consumers. When they shop in a store, they spend more, three times more. That's what our dual format has enabled us to have more of those customers visit our stores than our competitors. It's also enabled us to have more stores in the market than our competitors as well. This is particularly the case in small town Australia, where if you're going to survive in small town Australia, you really need to cover both channels, both commercial and consumer channels, to get the volume you need to support a store. Furthermore, that has actually given us a bit of first-mover advantage. It creates an effective barrier to entry for our competitors entering the market.
Once we're in market, the ability for our competitors to then enter the market, have a second auto store in that market, particularly when they're only servicing one channel, makes it really difficult for them. We also think that digitally, our dual format is a game changer. We've got a significant fleet of owned delivery vehicles, around 1,200 delivery vehicles, that are all delivering to our parts workshop customers all day, 30-minute delivery times, much like JJ in Europe, but they sit idle after 4:00 P.M. We can utilize those vehicles now. We can sweat those assets and use them to deliver B2C purchases direct from store to home. That's a B2C category-beating service that we offer. Our major competitors are only able to deliver in about a three to five-day timeframe, whereas we're delivering same day with our own vehicle fleet.
We also think that there's a significant opportunity in our market to digitally connect our customers, the car owner, with the car repairer, and achieve a fitted price for parts and accessories. The second sales channel we have is a collection of several business brands that address both general commercial as well as specialist commercial segments. This is around 25% of our revenue. That image that you see there is of Ashdown-Ingram. It's the largest brand in this group, and it's the country's market-leading distributor of automotive electrical parts, lighting, and thermal control. We've really got some great plans for this business, which I'll go through later. Then our third channel to market, which makes up the remaining 5% of our revenue, is our motorcycle accessories division.
It's made up of two businesses, McLeod Accessories, which is the market-leading wholesaler, AMX Superstores, which is now Australia's largest big box retailer of motorcycle accessories. We're excited by this because consumers are moving their purchasing away from the motorcycle dealership for their helmets and boots and riding apparel and wanting to shop at one-stop-shop big box retail outlets like AMX. We're really disrupting the market. We've got a strong pipeline of future branch opportunities with our AMX Superstores. Let's talk about the automotive aftermarket in Australia. It's continuing to display steady growth. Increased miles driven, vehicles are getting older, and we've got an economic backdrop of one of the more consistent performing economies in the developed world. Like I said before, it's really important to note that Australia is a significant landmass, same size as the U.S. We're over 25 million people.
Combined with that, the attributes of our car park, we're actually one of the more complex car parks in the world. There are more makes and models and variants of vehicles in Australia and New Zealand than what we have here in the U.S. You require scale. We think we've got a distinct competitive advantage because we have that scale to provide the breadth of inventory for that just-in-time value proposition that our repairers demand. In addition, the small population density creates that barrier to entry for any new market entrants or even for online disruption. Strategically, Genuine Parts Company involvement in our business has been an absolute game changer, not just for our business, but also for the industry.
The investment that we've made in inventory in our business, in adding branches, in systems, in working with our digital center of excellence here in Atlanta, in product sourcing, our global sourcing team, in leveraging the know-how of the managers in this room, of being able to see what's happening in the U.S. or in Europe and being able to take that down to Australia and lead the market has really been a game changer for us and has enabled us to accelerate the revenue in our business. Not only the revenue, though, but also our profitability, also our balance sheet efficiency. Our strategic plan through the next horizon is to leverage the scale that we've built and really optimize our business through six key imperatives. Firstly, we're simplifying our IT architecture.
We're converging our IT such that all our business units are operating on a single ERP system supported by the one source of data truth. That's a key enabler for our business. It's going to help us simplify our processes. It's going to reduce duplication throughout our entire supply chain. What it really does, it affords us the opportunity to act and operate our business substantially more cohesively than what we've been able to do so far. We also recognize the need to attract, retain, engage the most talented individuals. All organizations are in a war for talent, and we are absolutely no different. We're really proud of our team. We're proud of the tenure that we have.
In our business, the average tenure is nine point six years, and when a good proportion of your business is actually from retail, that's a stat that we're actually really proud of. We're proud of the passion that we've got in the business. We're proud of the culture that we've developed. We intend to continue to drive that such that we remain the employer of choice in our market. The strategic pillars to our plan are to drive a more efficient cost base, ensure we have a clear and compelling customer value proposition for each of the channels that we serve, supported by an optimized supply chain. That will involve facility rationalization, integration of systems, convergence, and automation as well. Overarching everything in our plan is to ensure that we continue to deliver shareholder value, consistent revenue growth, and improved return on capital.
An example of how our strategy is going to manifest is we're going to establish the NAPA Auto Parts brand in Australia. Much like we're doing here in North America, optimizing the portfolio with the Automotive Supply Group, we're doing the same in Australia and New Zealand as well. That image you see on the screen is our very first NAPA store. It was opened two months ago. That is in Mandurah, Western Australia. This NAPA business is going to constitute an offer which is drawn from all the smaller trade and specialist businesses that you see on the right, on your left. My right, your left. Together, these businesses generate over AUD 500 million in sales at the moment. Their product ranges, their customer channels to market, and the ways of operating are actually highly synergistic.
We believe there's opportunity for upwards of 150 of these NAPA stores throughout Australia and New Zealand, doubling the quantity of the stores currently. We're able to do this. We've already completed the really difficult work. We've integrated these businesses onto the one ERP platform. We've done extensive work engaging with our teams, engaging with our customers, and seeking support from the supplier community. We've been trialing this concept for a while in multiple locations with really terrific success, and we've rolled out these first two NAPA stores in the last two months. Whilst they're still early days, we're really encouraged by the results we're seeing across a number of metrics. The results of our strategic plan greatly simplifies our business, makes us highly customer-centric. It creates a compelling value proposition. It enables us to support our customers seamlessly, either through our Repco business or our NAPA business.
It makes us easier to do business with. It reduces our cost base substantially. That'll give us the opportunity to reinvest some of those savings back into our value proposition and setting us apart from our competitors. We're really tremendously excited by the growth opportunities that we have with this strategy. Digital. Digital is a very important initiative for Asia Pac, obviously in line with global trends, and we've made significant investments in this space. From a B2B perspective, our catalog development, plus the connectivity solutions that we have in our organization to workshops, to mining customers, to industrial customers, have driven exceptional growth in online transactions. Upwards of 38% of all commercial transactions are now done digitally in our business. Our catalog has won the industry award for the last three years running for the most outstanding e-commerce platform for commercial customers.
In 2018, a little over 12 months ago, we launched an omni-retail solution for our Repco business. Within the space of a year, we're now the second-largest B2C visited and transacted site in the market. We couldn't have done that without being helped by Genuine Parts Company and our digital center of excellence that Rob Milstead is going to talk about here a little bit later this afternoon. We're proud to launch the first solution in Australasia, which enables consumers the ability to select their vehicle by putting in their license plate details. We're currently a click-and-collect solution only, but we're going to roll out that market-beating disruptive delivery solution using our own fleet, far surpassing the three to five delivery timeframe of our nearest competitors, delivering same day. Digital connectivity has been huge for us, and we're going to take it up a notch.
Pleased to announce that we've completed negotiations to acquire Sparesbox. That's Australia's leading pure-play automotive parts and accessories business, and that transaction is going to complete on July 1st. That's not currently material from a financial perspective, but what Sparesbox does for us, they are a cutting-edge digital specialist. They've got 68 team members who just live, breathe, eat, sleep digital innovation. We're excited about bringing that to our business. Their capability, their agility, our ability to be first to market, our ability to extend their offer across our organization, as well as the synergies that they bring, is really going to take our business to another level. In Australia, most e-commerce transactional websites are just that. They're traditional transactional e-commerce sites. What the Sparesbox team are doing are developing really deep and emotional connections with customers. We're going to integrate that team with our digital team.
We're going to enhance that with our digital center of excellence here in Atlanta, so it becomes really part of the fabric and the DNA of how we transform digitally our marketplace. As a recap to our business, really solid market fundamentals, very stable macroeconomic conditions. We've got a terrific strategic plan. We're removing duplication. We're reducing costs. We're optimizing our supply chain. We're excited about taking the NAPA brand to Australia. It means a lot. It's actually well-known in Australia and New Zealand, and that's a terrific strategy for us. We're greatly enhancing our digital capability. In our mind, we're well-positioned to consistently grow faster than the market. Thanks for your time.
Great job, guys. That was a super morning of presentations. We're going to take a break. We'll start getting you back in here around 10:15. Please enjoy the outdoors, the displays there, and in the lobby as well. Thank you.
All right. Well, finally we get to the good stuff, the fun stuff. What a morning. Welcome back, everybody. My name's Randy Breaux, and I'm responsible for Motion Industries. I'm joined today by two of my colleagues, Kevin Storer, who runs our U.S. and Mexico sales operations in the field, and also by Dermot Strong, who runs our Canadian business. If you haven't met them, please say hello after the break. Thanks for the opportunity to share information about Motion Industries with you today. We are the industrial parts group for GPC in North America, and our vision is to be the most preferred industrial solutions provider to the industries that we serve. Our core business is servicing the maintenance, repair, and operation needs of our customers. However, we're much more than just an MRO parts provider.
Over the years, Motion has earned a position as being the leading industrial parts distributor, specifically when you refer to bearings and power transmission parts. I've had the fortune of working on both sides of the business, both on the manufacturing and on the distribution side, and I can tell you, it's really where my passion lies. Motion goes to market with the best brands or what we commonly refer to in the industry as Tier 1 brands, most of which are produced in North America. This includes over 7 million parts that we have available, which allow us to provide superior customer service to all of our customers, variety of customers, as you'll see shortly. It's worth noting that 50% of the orders we receive on a daily basis are unplanned orders.
Our customers don't know when the machinery in their plants are going to break, so they don't know what parts they need at any given time. We have to be right there, ready to serve them when that part breaks. To do that, we have to have a very efficient supply chain, and that's how we win in our space. Earlier in Paul's comments, he announced the GPC was acquiring Inenco, and we'll finish that pretty soon. We actually have Roger Jowett, who's the CEO of Inenco, here today. If you get an opportunity to say hello to Roger, please do so. Inenco really covers all of Australasia for us on the industrial side, and we're really happy to have them part of the family. Truly gives us a global footprint in industrial.
Customer and supplier synergies already exist between us, and we recently had one of the Inenco team members here for 12 weeks working on additional opportunities, and we've already been able to take advantage of those for both Motion, for Inenco, and for GPC as a whole. Look forward to the additional opportunities that will come out of that acquisition here in the near future. Unlike other industrial distributors you may follow, and can I see a hands of those that follow industrial distribution or industrial manufacturing? Not too many. Hopefully, this will give you a little bit more insight into our business on the industrial side when we finish up. Our go-to-market model is much different than many of our competitors. We go to market with a highly technical sales force. We're not just a read and replace parts distributor.
We actually bring expertise to our customers. We have a wide variety of products and services, and all of these products and services require expertise to close the sale. We do it in such a way that we become the expert at our customer's location. You will see as we talk about this shortly, how we do that. We also do business in many ways with our customers. We want to do business any way the customer wants to do business with us. One of the things we have been seeing lately is a move away from picking up the phone and calling us to more email and more e-commerce in our business. Our phones do not ring in the branches like they used to ring 10 years ago. Instead, we are doing a lot more transactions via e-commerce.
We have got a robust e-commerce platform to handle this, second to none in the business. Motion has a rich history, just like Genuine Parts, as you saw there, of a very stable and long-tenured workforce. The company was founded in Birmingham, Alabama, in the early '40s, mid-'40s, and the first-year sales was $500,000. That was a lot of money back then. In the 1990s, we exceeded $1 billion in sales when we acquired Berry Bearing Company, headquartered in Chicago, Illinois. Throughout the 2000s, we had a pretty aggressive acquisition schedule, and that took us to 550-plus locations. In 2018, we merged the EIS group that Paul mentioned earlier into the industrial group. We had a very good sales year as Motion in 2018, and that pushed our sales over $6 billion.
That was really the record that we set last year of $6-plus billion in the industrial group, and we are very proud of that. Our footprint in North America, I looked at the NAPA maps, and man, I thought we had a lot of measles on this map, but after looking at the NAPA maps, we got a long way to go. Our footprint in North America includes our branches, repair and service centers, and our distribution centers. We are capable of providing same-day service to almost all of our customers and absolutely overnight service to every customer that we serve. As our business continues to evolve and our customers' demands changes, we adjust our brick-and-mortar footprint, and we adjust our strategy so that we can serve them the way they want to be served.
I mentioned our Tier 1 suppliers earlier, and it is really worth noting that approximately half of our annual purchases come from our top 50 suppliers. To put that in perspective, we have over 39,000 suppliers. We have a very long supply chain tail. These top 50, however, are the best manufacturers in the business, in the industrial market space. In all cases, we are their largest distributor partner, and this really allows us to leverage our spend and our opportunities with these suppliers. Some of these you probably know if you follow the industrial market. These are the best of the best in the industry. We serve a very fragmented group of customers as well, in very diverse markets. Our top 12 industries, which you see over here, these top 12 industries are really the ones that we focus in on the most.
Machinery and equipment at the very top left here, that's our largest industry that we serve. Represents about 10% of our total business. That is the largest industry that we serve, so no industry is more than 10% of our total business. This is where the original equipment manufacturers that we serve are captured. People like Caterpillar that you see here on the bottom. Now, we don't really supply products that go on the equipment as much as we supply products that go into the plants to manufacture their equipment. That's a key point. Occasionally, we will supply some products that actually go on the original piece of equipment. The other industries that you see there that are really key and important too, food and beverage, iron and steel, pulp and paper.
An interesting point on pulp and paper, we have about 90% of the paper machines in North America under contract. In a very mature market, we still have growth in the paper industry because we have so much wallet share in that paper industry. In most cases, these customers have a multi-year contract with us for all of their MRO business. Multi-year contract will be three to five years, typically. It's a great position to have that multi-year contract because at the beginning of every year, we wake up, and we know that we've got this business already in the bag for the year for the most part. When you think about it, we have about 55% of our total business under contract. That's a lot of business to have year after year that you know you have it in the bag.
We get churned on that business every year. This year, for example, we have about $1 billion of contracts that we will have to renew. Our success rate at renewal is almost 100% once we own the business. We're very proud of that. It's a very good way to keep us focused on our business. Also the diversity of the industries that we serve help us become a bit recession-proof, because as a recession hits and one business drops, sometimes another business stays up, so it keeps us balanced pretty well. Product demand from our customers is deep and wide. Just like the industries that we follow, we track about 12 different product categories, as you see here. Bearings and power transmission represent our two largest product categories. Each of the bearing and the power transmission category represent about $1 billion in annual revenue each.
Right behind that is industrial and safety supplies. That's been our fastest-growing product category for some time now. The reason is because every customer we serve buys industrial and safety products. Not one customer we serve doesn't buy these products. It's quickly approaching another billion-dollar category for us. The way that these products grow, when you look at bearings, this grows typically in the low single digits, and there's reasons for that. Bearing manufacturers are producing much better products. The maintenance practices are getting much better on bearings, and really, it's lack of maintenance that causes most bearings to fail. Right? That's a category that we don't think will grow much faster than low to mid-single digits going forward. Power transmission. Power transmission grows mid-single digits year-over-year.
As we look at our product categories, we are focusing our attention on those products that have a faster-than-market rate of growth and also can be more profitable than some of these very mature core products. Other products such as hydraulics, pneumatics, electrical and automation, they all have significant growth opportunities for us, and we are investing in resources to broaden our product offering in these areas. They're also typically more profitable than the bearing and PT product category. Our value proposition can be summed up in these five icons you see behind me here. When you take a look at it, over here, reduce purchase price and ownership cost, that's what every customer that we serve is looking for. How can they reduce their total cost of ownership?
That's where our expertise in the market and the products that we have available come into play, and that's where our close partnerships with our manufacturers really allow us to go in and find ways to help them reduce total cost of ownership. Asset management. This would be taking care of the assets that are either on the plant floor in operation or in their storerooms. Of course, operational and productivity improvements. If you were just a read and replace distributor, you really wouldn't be affecting their operational and productivity opportunities. Because we're not, because we take in a technical sales approach to the customer, we find ways to help them reduce their operational costs and to improve their throughput in their plants, therefore improving their productivity.
That's a key value add for us in our value proposition. Being a comprehensive single source is very important to our customers. They prefer to do business with one company that can service all of their needs. Finally, the knowledge and expertise and the innovative solutions that we bring critical because what's happening right now on the plant floor is many of the older, more experienced technicians and mechanics and electricians are starting to retire out. The baby boomer retirement is hitting our customers, and they're looking at us to help augment the expertise that they're losing on the plant floor. We have a very knowledged sales force that can go in and provide this as part of our value proposition. Outside of our traditional branch sales, we have several hundred field product specialists that provide superior technical expertise to our customers.
I get asked a lot, what really differentiates Motion from your competitors? I like to sum it up like this: We are not an indiscriminate order taker. We are a very strategic market maker, meaning that the value to our customers is not just looking at a number and replacing it, but it's having the specialist in place that can understand the application and the products available that can really improve the operation and ultimately improve our customers' profitability. That's what separates us from our competitors. We also have about 50 repair and service shops around the country that can repair, refurbish, or replace failed products from our customers. This is very important for a couple of reasons. First, if you have the failed product in your shop, you have the ability to determine whether it's repairable, and if it is repairable, get the order.
If it's not repairable and you have it in your shop, you can get the replacement order. If it went to another shop that we didn't own, and it was deemed unrepairable, somebody else is going to get the order. It's very important that we're able to provide that repair or replacement in our shop. Second, the repair business makes us pretty sticky with our customer, or we like to say Amazon-proofs us from our competitors. If we can offer service that our competitor can't, that makes us a little bit more valuable to that customer. This is very important. Lastly, repair business is profitable, good business to be in. The North American market's roughly $80 billion in the core products that we serve, we have about 8% market share.
When we look for growth opportunities, we're looking at more wallet share from the existing customers by offering them new products, new technologies. We also look at adjacent markets where we can expand our product offering. Quite frankly, right now is a pretty exciting time in our industry because IIoT, the Internet of Things, and new technologies are really bringing us to a different stage, if you will, in the industrial distribution market. Because we're going to be able to predict and prevent failures in the plants. Being able to predict a failure allows us to get product there to the customer before they have unplanned downtime, this is very important to the customer. As you go through the demos outside, take a look at what we call P2MRO.
P2MRO stands for preventive predictive maintenance, repair and operations, we have products that we are currently installing in plants on those critical assets to make sure we keep that plant up and running. We get a lot of questions about what influences our business, I'm going to address a few of them now. Happy to take questions later. We track very closely with industrial production and PMI. A little bit more closely with industrial production, as you can imagine. We do track very closely to those two indexes. Inflation. We watch inflation. As somebody mentioned earlier, we haven't seen much of it in the last couple years, few years.
Inflation's not necessarily a bad thing, because in most cases, we can pass those price increases along to our non-contract business immediately, we have times in our contracts when we can pass it along to our corporate account customers. Inflation's not necessarily a bad thing for the industrial business. Tariffs. Tariffs haven't affected us much up to this point. The Chinese tariffs didn't affect us much because most of the product that we purchase is from North American-based manufacturers. Some of the components that they put into their products are affected by the tariffs. However, it's not that big of a degree, it doesn't reflect in the purchase price that much. Now, the Mexican tariffs could be a different story, we're watching that very closely.
Many of our manufacturing partners manufacture in Mexico, we're watching that very closely, and we'll see how that affects us as we go forward. The field we play in is not lacking of competition, you can see here a list of our top competitors. We are number one in our space. You really have to add up number two, number three, and number four to equal the size and scale that we have in the marketplace. As I said, I worked on the manufacturing side. I know all of these competitors intimately, worked with them, and I can tell you, I'm very happy to be working for the number one distributor in the space.
Our value proposition distinguishes us from many of these competitors in different ways, our contract business is a game changer because none of these competitors have the number of contracts in hand that we have with our customers. Growth promotion is certainly key. Regarding growth, we have a key focus on small to medium-sized customers for organic growth, we've got a very interesting incentive plan for our salespeople to go out and capture that small to medium customer. In addition, we continually leverage our relationships with our contract accounts for more wallet share and more geographic expansion. We're seeing a number of our corporate accounts move into other countries, they're asking us to follow them. We're weighing what we can do to service that business as they migrate to other areas of the world.
Corporate accounts, I've mentioned that a few times, this is really the differentiator for us and the services we provide here. You see that vending truck outside, that will show you some of the things we do in our on-site solutions. What we do. It's all these other things that we do that really make us such a strong competitor in the marketplace with corporate accounts. You can see some of the corporate. I'm sorry, it's on another slide here. Some of those corporate accounts we showed you earlier, in the various industries, we really have a solid position here. We can't overlook acquisitions for growth, though.
Much of our growth in new markets and new products over the years has resulted from acquisitions, we actively look for about 1%-2% of our annual revenue growth to come from companies that we acquire in a given year. Earlier this year, we added Axis Automation, a lot of our focus has been in the automation space recently because as we said, experience is retiring off the plant floor. Our manufacturing customers have got to automate their processes that create no value to compete on a global basis, the cost of labor is getting higher, the availability of labor is getting scarce. Automation is a key for them, it's a key for us going forward. Our acquisition focus, as I mentioned, is in automation. It's in conveyance solutions. You see all these distribution centers being stood up all over.
We sell a lot of the MRO to those facilities. These are growth areas that are typically higher growth rate and a bit more profitable. Another reason that we acquire is for the talent. Just like everybody else, there's a talent deficiency out there. When we acquire companies, we get good talent that comes with it. Many of those people are the leaders of the future for our business. We really remain focused in these markets, but we'll also expand our product offering, our technical expertise, the introduction of new technologies, repair and services to customers in such a way as to continually improve our value proposition that we offer. We expect to grow faster than the overall industrial market as a result, and to continue to extend our leadership position in the industrial distribution segment. Our future is very bright at Motion.
The investment being made in our supply chain functions will continually optimize our fulfillment capabilities. We are able to leverage many of the strengths of GPC, such as co-locating future distribution centers where it makes sense, and reducing our operational cost. We're ready. We're really excited about the future. We hope you are too on the industrial side. We're keeping industry in motion. Thank you, guys. Enjoy the rest of your day, and be sure to stop by the vending truck and the P2MRO displays outside. Appreciate it.
All right. Good morning. Now let's talk about business products, right? It was great to meet so many of you last night, at the cocktail reception and really begin to answer some of your questions. I'm excited about this opportunity because I suspect of the three primary businesses that Genuine Parts is in, our business may be the least understood. This is a great opportunity to explain what it is that we do. You may be surprised to learn that SPR is the oldest continuously operating business in Atlanta. SPR wins the timeline war that you've been watching all morning. 171 years in business. There actually was a man named Samuel Pierce Richards, who founded the company along with his brother JJ, way back in 1848.
Whenever someone comes into my office and says, "Rick, this is the biggest challenge our company's ever faced." I go, "I don't think so. I think guiding the business through the Civil War, okay, in Atlanta might have been a little bit more of a challenge, okay, than a Chinese tariff." As you can see in this timeline, we were acquired by Genuine Parts in 1975 when sales were only $30 million. Now, some 40-plus years later, we've grown into a $2 billion business. Key to this growth, okay, in the last few years, has been our acquisitions in the JanSan and safety space. That's really part of this transformation of our company that is underway right now. The real message of this slide. I'm sorry. Can you go back? I hit that early.
The real message of this slide is that you don't stay in a distribution business, you don't stay in business for 171 years unless you're really good at adapting to the changing marketplace, and that's exactly what SPR is in the middle of right now. Why does a reseller purchase from S.P. Richards? Well, there are a number of reasons. Most importantly, we help our customers, okay, who many are capital constrained. We help them deliver a broad assortment of products to their end consumers. We are now the only full-service, independent, national business products wholesaler, and we'll talk more about that. In doing that, we really become a valued partner in our customers' supply chain. We offer leading distribution capabilities.
An order that we'll receive this afternoon at 6:00 P.M. will be picked, packed, and shipped and will be on our customer's dock by 4:00 A.M. tomorrow morning, ready to load onto their trucks for last mile delivery. We offer a diversified product Branded and private label SKUs across multiple product categories. We're strategically positioned in the growing Jan San and safety businesses. Lastly, we provide a wide variety, like many of the other businesses you heard this morning, of value-added differentiated services that our customers have really come to depend on. The marketplace that we serve is very large. It's well over $100 billion in size, with really no one player having a dominant market share. Roughly half of this market is the core office market, which many of you probably think of when you think about our company.
The other half, okay, is this traditional Jan San and safety supplies businesses, which are nearly as large as the office and growing each and every year. What drives consumption in our industry? It's just what you would think. If the economy is growing, companies are hiring. If companies are hiring, that drives consumption of our products at the end user level. Our business model is that of a pure-play wholesaler. No retail in our business whatsoever, pure-play wholesaler, which means we don't sell anything directly to the end users who ultimately consume our products. The core of our value proposition, then, is that we enable resellers to grow both their top and bottom line by bringing them this full, broad spectrum of products that their end users demand. We execute this value proposition across a base of roughly 10,000 resellers.
Many of these companies you would recognize, such as Office Depot, Staples, and Amazon, represent our 3 largest customers. Amazon, in fact, is right now our fastest growing customer because they want our private label brands on their site. We get great reviews. They make money. We make money. While there's much critical talk about the Amazon effect in our industry and all industries, really for S.P. Richards, we're one business where it's really more of an opportunity than a threat. An even greater number of our customers are independently owned, similar to the other businesses, independently owned office products and Jan San distributors, and they represent a key segment of our economy, and it's growing. You may not have ever installed a brake pad or repaired a belt on a conveyor, but everyone in this room has used the products that we distribute.
The product categories that we sell represent this broad cross-section. Every business in North America has to have these products to run their companies. As you can see in this product representation, we sell everything from traditional core office products, which you'd have at your desk, to the desk and chair itself, okay, to the break room where you might go for a cup of coffee or a snack sometime during the day, to all the supplies in your washroom when you go out on break. All those products come from S.P. Richards, and also in your factory floor. When you leave the office at the end of the day and go home for dinner, you probably see our disposable gloves, either in the grocery store, if you stop there on the way home, or in the restaurant if you go dine out.
Our products are everywhere, almost to the point where you just don't even see them. You may be surprised to see on this chart that the JanSan and safety products are now our largest and fastest-growing category. For perspective, the 37% JanSan business in gray that you see just 4 years ago was only 19%. That's how fast our company is changing. In total, we distribute nearly 100,000 products from over 1,000 suppliers. Many of these are popular consumer brands. You would all know the names, 3M, Georgia-Pacific, GOJO, just to name a few. Also on this slide are some of our private label brands, which now represent 30% of our sales. That's a key number. 30% of our sales are now private label. At our core, we're a great logistics and distribution company.
Today, companies like Amazon seem to get all the credit for bringing next-day delivery expectations to the consumer market. We've been doing it for 50 years. Through this network that you see on this slide, we've been doing it for over 50 years now. Like most distribution businesses, there are a number of competitors in our space. Essendant, which you may know is owned by Sycamore Partners and in the process of merging with Staples, is really the only other full-service wholesaler in our industry. Their association with Staples creates channel conflicts for them. The balance of these competitors that you see really specialize in just one or more office product categories. They really don't represent the type of single-source supplier that we can be. We believe this results in us having a significant competitive advantage going forward.
We have some very specific strategies for growth, including product line expansion, where we plan to continue to expand the growth of our private label brands that you see here, along with expanding our offering in the growing JanSan and safety space. Product categories. Some examples of this would be technology-related products like a digital whiteboard used in schools and universities and businesses or all you on your phones, as that battery goes down, replacement power sources for mobile devices, both growing categories for us. We also have an exciting opportunity to serve the JanSan marketplace retailers, e-tailers who only sell online. Each of these represent key emerging reseller channels for us. From a growth strategy, logistics, we're going to continue to build out our logistics capabilities as we ship everything from an individual SKU to a fully globally sourced container for our customers.
From a marketing perspective, we're leading the transition from paper to digital catalogs, specialty catalogs, marketing promotions, and support. Our resellers depend on us for these marketing services. Many of our resellers also depend on us for key elements of their business strategy, providing detailed financial reviews, guidance, even succession planning. Lastly, we provide key data analytics for all our customers. How they rank their products on their website, we support that. We also provide them with all the algorithms that they use for pricing to help them stay competitive. In summary, we will continue to invest in the core office channel and win new business utilizing the strategies that I've shared. We accelerate growth in the JanSan channel as the merger of Staples and Essendant has created a new opportunity for us.
We will continue to make selective investments in new customer-facing capabilities to further accelerate our customer and SPR growth. We are developing additional pricing options and alternatives. Customers want to buy full cartons. They don't always want to buy individual SKUs, we're building out new pricing for that opportunity. Maybe equally important, we flattened our organization structure because when you're in a next-day business, speed wins, and that's how we're going to compete. As we look ahead, we're bullish on our opportunities ahead of us. You may say, "Well, wasn't it just one year ago that Genuine Parts was going to spin you off through that reverse Morris trust and you were going to merge with Essendant?" That deal, as you know, got disrupted by Staples and Sycamore.
As a result of that disruption, we actually have more opportunities today than we had one year ago. Our core competency of being able to efficiently and profitably ship and fulfill orders on a next-day basis, that's a great skill set to have in an increasingly digital world. We like to think of ourselves as being 171 years young, and we're embracing all the changes that we see in the marketplace to capitalize on them for our shareholders and our company. Thank you for your time this morning.
Good morning, everyone. My name is Scott Leprohon. I'm the Executive Vice President of Global Procurement for Genuine Parts Company. I too enjoyed having the opportunity to be with all of you last evening. I got to interact with a number of you. As exciting as our event was last night, Sid, there were a couple of other events last night, I talked to a couple of Boston Bruins fans last night. The Bruins lost in the Stanley Cup finals, that wasn't the biggest event last night. The biggest event last night was James Holzhauer lost on "Jeopardy!" You got "Jeopardy!" fans out there? That was big doings.
From what I understand, I obviously didn't see it, I was with all of you, from what I understand, he lost by not betting enough in Final Jeopardy!, and he'd gotten to where he was by aggressively betting all the way along. I think the lesson in it for all of us is stay true to who you are, and that's what GPC's done over a long period of time. I'm excited to spend a few minutes with you today talking about kind of bringing all of this home. You've had a chance to listen to the heads of all of our businesses. You've gotten visibility into the strength of our management teams, into our long-established businesses and track records, the acquisition activity that we've had, and also now our global footprint. Why does that matter? Why is all that important?
I'm going to spend a few minutes today talking about that. The added value of procurement when it comes to global scale is really powerful, and I look forward to taking you through how all that works. I'm going to touch on 4 key areas, and then at the end, I'm going to spend a few minutes on both inflation and tariffs, as I know that's top of mind for all of you. The 4 key areas I'm going to talk about first are scale, global supplier relationships, our strong brands, and also our global sourcing capability. Let's start with scale. Why is scale important? Our global presence and global footprint makes us a really attractive partner for global suppliers.
You've heard a lot today about the fact that there's consolidation happening across all of the markets that we serve, in each of the industries that we serve, and that the complexity in each of the markets that we serve continues to ramp up. The requirements around having inventory close to the point of demand, the investments required in IT, and so on. It's very important for our key global suppliers to have a partner like Genuine Parts Company that's positioned there, that has the expertise, the capability, and most importantly, the financial wherewithal to make the kind of investments that are necessary in each of those markets. Most recently, specifically, the acquisition activity that we've done, both in Europe and with Inenco and in other places, has allowed us to have very specific negotiations around leveraging our global spend to improve our terms and conditions.
I'll speak more about that. I'm not sure, it came up a couple of times. Paul mentioned it earlier, that a number of our key global suppliers serve us in automotive and also on the industrial side. That big scale that we have with them gives us a great opportunity to partner also, obviously, negotiate. We even have a couple of suppliers like Kimberly-Clark and 3M that serve business products, automotive, and industrial. There is synergy across all the businesses as it relates to our suppliers. Here's a few examples of the key suppliers that I'm talking about. The likes of Schaeffler and SKF, Gates, and 3M are key suppliers to global automotive, also are very key suppliers to our industrial businesses, Motion and Inenco. You saw some of them on Randy's slides.
From an automotive standpoint, many of these suppliers have significant original equipment and OES business. They've got key insight into what's going to happen to the future of new car builds. They have parts in those new vehicle platforms, and they've got an eye to what the future of mobility looks like. They're very important partners to us. They continue to reinvest in their businesses and technology. They're going to be around for many years to come, and they're looking for global partners like us who are doing the same thing, reinvesting in our businesses and are going to be long-term players in the aftermarket. Many of these key suppliers are European-based, and our AAG acquisition has really served to help raise our prominence as an even more significant partner to them because of our footprint in Europe.
To give you an idea of how important they are to us, this group of suppliers alone is worth $2.2 billion in purchases and a little over 20% of GPC's total cost of goods. They're significant. We expect to see that systematically grow over time as we continue to grow our footprint and also, to some degree, rationalize our supply base. Second, let's talk about our powerful brands, and this has come up a couple of times already. They're an important part of GPC's portfolio. I'm going to focus strictly on the NAPA brand today, but obviously, the Repco brand is also iconic in the markets that they've grown up in.
They've built over a very long period of time, have very high unaided awareness from the consumer, and they've become so strong that they transcend, obviously, the markets that they're in currently. To give you an idea of some of the things that we're doing with the NAPA brand, you heard a little about some of this today, and some of it you haven't. First, we've got a growing store presence in Mexico, NAPA store presence in Mexico. We're up to 42 stores, and it is the horse that we're going to ride in that market after a divesting of Auto Todo. Second, you heard from Rob Cameron about converting and opening NAPA stores in Australia and New Zealand. I think the plan is 140 stores over three years, and we will have a significant NAPA presence there. That's important to our suppliers as well.
Jean-Jacques mentioned we're launching the first NAPA products in Europe in the second half of this year. Again, this is going to serve a very important market need and provide what we think will be differentiation in those markets. Next, I'd like to talk about global sourcing. Many of you know a lot about global sourcing. Global sourcing, it's all about scale. The more volume you can bring to a factory, the better deal you can cut with them. We've been building our global sourcing capability for more than 25 years. This is not new to us. We have a very experienced team, longstanding team, with the relationships of great factories all over Asia. It's another example of how our scale and diversification provide strength. Our global sourcing team's a full-service office. They do everything from identifying factories to qualifying them, to QA, inspection, order management, PO tracking.
They do everything involved in the global sourcing process. They do this on behalf of all of GPC's subsidiaries. They're broad capability. Our scale allows us to have this substantial team, and they are all our own direct employees, very importantly. This is not something we outsource, work with third parties, trading companies, third-party inspection, and so on. They're all direct GPC employees. That's important because it gives us complete control over product quality, over on-time deliveries, all aspects of why global sourcing is important. In addition, it helps us negotiate strong freight rates and also priority on steamships, and sometimes given timing, that is very important as well. You see on the screen our footprint.
We have full-service offices in Shenzhen and also in Shanghai. We have three origin DCs at the ports, one in Yantian, one in Qingdao, and one in Shanghai, where we inventory products and we build very easy-to-consume mixed containers that we ship out of those ports to our distribution centers here in North America and also in Asia. We'll direct source more than $400 million in 2019. Our strategy is to first partner with our global strategic suppliers. Also augment with our global sourcing direct sourcing efforts on a couple of strategic product categories like brake pads, friction material. Also on tools, accessories, and value products in automotive, in furniture that Rick referred to, safety and other core business products in the business product segment. We're just getting off the ground in Europe.
We've got our first couple of product categories launching from a global sourcing standpoint there. Again, we feel like this gives us a turnkey ability to move very quickly in those markets. The same will be true of Inenco as we add that business. Lastly, we thought it might be helpful if we put all this together and showed you an example of how we put it to work. I'm going to take you kind of through the AAG example. Jean-Jacques described the fact that GPC acquired that business in November of 2017. When we announced that acquisition, we committed to $25 billion of synergies over three years. We followed a very similar playbook as to the one we used when we acquired GPC Asia Pacific six years ago.
For those of you who followed us in those days, you might remember we initially bought a minority investment in that business. Then had the opportunity to buy the remainder of it after we reached some financial hurdles. We actually reached those financial metrics about a year earlier than anticipated because partially due to the great success we had in our synergy efforts. Again, we followed a very similar playbook. Let me take you quickly through how we go about doing that. The first thing we did was approach our key global suppliers that serve us in North America, Europe, and Asia. There's a good number of them that do that. We've negotiated global rebates recognizing our expanded volume. Second, we've added our North American and Asia Pacific businesses to GROUPAUTO International, that international trading group that Jean-Jacques mentioned earlier.
It comes with a variety of marketing services and so on, but it also has supplier rebates attached to it. There's a financial benefit to us there. Third, we've gone after payment terms enhancements. We've introduced a supply chain finance program in Europe like we have here in North America, and we're negotiating payment terms enhancements in that market to mirror the same level of success we've had in the U.S. We have had some early success there. You'll begin to see some of the benefit in the second half of 2019. I already spoke about the NAPA launches that we have going in Europe. They're going to serve a very important market segment issue for us, opportunity for us, provide differentiation, we think, for our network, and leverage the powerful brand that exists. Lastly, global sourcing.
We're just getting our first three product categories off the ground. We have a lot of upside as it relates to global sourcing for AAG. We're happy to report that we're right on track to achieve our $25 million commitment, and are very pleased with the efforts so far. Lastly, I'd mention that we have a handful of really important suppliers to us here in North America that are not today present in Europe that have interest in following us there and serving us there and are evaluating acquisition activity. That's a potential future positive for us. Let me shift gears and just touch briefly on both inflation and tariffs, because they're kind of an elephant in the room with all the activity that's gone on. First, as it relates to inflation, I think Randy touched on it.
In general, as a distributor, we view inflation as a positive. We're generally able to pass it to the marketplace, and it provides all of us revenue kick and in some cases, some ability to make additional margin. In automotive, we haven't seen really any inflation in more than five years. It's been very flat. I think in a couple of the years, we actually had slight decreases in cost. In industrial and in business products, we've had low single-digit inflation, but also very minimal. Only in the second half of 2018 and now in the beginning of 2019 have we begun to see some, and it's been largely driven by the tariffs. Let me address that. We'll start with, we originally built these slides. They just said tariffs. We had to add Chinese yesterday because of what's happened with the Mexicans.
I'm going to start with the Chinese tariffs. Just to tell you what it means to us, it impacts about 10% of our U.S. cost of goods, and that split you see on the screen, 20% of the cost of goods in automotive and 10% in business products. Generally, we've been working hard to split the tariffs with the suppliers. I'll take you through our game plan a little bit. But the initial 10% tariffs, we kind of took 4%-5% price increases on the individual numbers. It meant about a half a percent of inflation to our U.S. business. Now move to the 25% tariffs. We think this would add about 2.5%. We're still working through it, obviously, because they're not in place yet, but we're projecting that it'll add 2.5% inflation to our U.S. cost of goods.
A little bit about our game plan and how we've dealt with these and worked our way through. The first thing that we've done is tried to determine if there was the possibility of geographic diversification. Could we move the product somewhere else, or could our supplier move the product somewhere else? We had some success related to that, and we continue to look for other opportunities with the assistance of our global sourcing team. We've negotiated support from Chinese factories. During the 10% tariff piece especially, they've been very willing to work with us on that and had good success there. Currency, as the Chinese currency has floated, has also provided a buffer and has allowed us to defray some of the costs.
We've seen a couple of examples, actually, of Chinese factory owners JV-ing or buying into factories outside of China as a means of selling us from a different country. We've had success to some degree, defraying the impact in a number of different ways. Now we've moved to the 25% tariffs, and I'll tell you how we're going about it much the same way we did the 10%. We're actively negotiating with all of the suppliers that we're dealing with. We're working to understand exactly what the dollar impact of the tariff is, without margin, without cost, just really what the exact dollar impact of it is, and then trying to negotiate savings with those suppliers, also delay timing, the impact of currency, all the things that I mentioned earlier.
Our plan is, after all that is done, whatever's left, that will be the true impact that comes through to us in price increase, that we also pass that to the marketplace with a goal of having no margin degradation to our businesses. We were able to very successfully do that with the 10% tariffs, and we anticipate that we have the same capability now. Then on Thursday night, sitting on the couch watching Jeopardy!, and I saw a tweet from President Trump announcing the 5% tariffs on Mexico. That has, again, turned our team onto yet another project. It impacts about 7% of our U.S. cost of goods is of Mexican content. We have yet to hear from any suppliers, so there's a bunch of work yet ahead of us.
As you know, the footprint there is an escalating scenario there where it goes into effect here June 10th, but goes up 5% every month until October and 25%. We hold out hope in both cases that sanity will play through and some negotiations will take place, and this will all be behind us. Anyway, we've got our teams fully engaged on contending with them as they said. I thank you very much for your attention. I enjoyed having the opportunity to speak to you all today. Let me close quickly with this. Hopefully, you have a better feel now for how GPC's platform provides powerful advantages. Our global footprint makes us a very attractive supplier or a very attractive partner to strategically important suppliers. Our combined spend helps us achieve terms and conditions that are best in class from best-in-class suppliers.
Our three platforms feed our ability to execute with our own global sourcing team and also drive down freight costs, create private label opportunities, and so many other things. Lastly, as we continue to grow, it'll only serve to increase our leverage, enhance our capabilities, and improve our performance. Thank you very much again for your attention.
Good morning. I'm Greg Miller. In every one of the presentations you've heard this morning, you've heard about how important technology is to our ongoing strategies. In this session, Rob Milstead and I are going to give you a few additional insights into that, and we're going to lead it off with Rob talking about our focus on building digital capabilities.
Thanks, Greg. Appreciate it. Good morning, everyone. Wanted to start with a little bit of context as to why technology has taken on such an important role as GPC continues to grow and scale. It really starts with the fact that consumers now rule the day. We are all consumers in our personal lives. Think about what your life looked like 10 years ago and now what your expectations are. There's really two main things that have changed. Number one, mobile technology. The iPhone was introduced in 2007. Certainly not the first smartphone, but the world has fundamentally changed because of the smartphone. The second thing that has fundamentally changed that dynamic is high-speed data access. Millennials today, or even a younger generation, don't even understand the concept of going online. They exist online.
What this really means is this chart shows customers are now at the center of controlling how they interact with companies and what their expectations are. The pace of change has fundamentally sped up. Our role, Greg and I partner together to figure out how to scale technology, whether that's digital or traditional IT, across people, process, and technology to enable our strategies to help our business units grow. If you think about the power that consumers have today, they have anytime, anywhere expectations. We are nothing but a browser tab to them when they think about product research, the ability to look up pricing information, the ability to get training information, and so they expect to be able to interact with you anytime, anywhere, any place. Often I'm asked, "What is GPC's omni-channel strategy?" It's quite simple.
Serve those customers that are now at the center point any way that they want to be served. That does not just mean sell products to them anytime, anywhere, any place. That means understand what their needs are, whether it's an industrial customer, a NAPA store
Provide the right tools and solutions for them so that we can make our value proposition come to life. It's not just about the product anymore. It really is about our ability to deliver a value proposition, leveraging digital and leveraging technology. What does that mean? That means we have to evolve beyond just the digital technology itself. That means we have to question how are we organized? We have to innovate our supply chains. You heard some business units talk about the ability to leverage our national footprint to have the right inventory at the right place at the right time. That means we have to use digital and technology to innovate our supply chains. We have to investigate our cost structures. We have to investigate pricing. Price transparency is real. That doesn't mean we all want to be in a race to the bottom.
It means we have to use the power of data and analytics to make better decisions about how we price for our customers. Let me move on just a little bit here. Next slide up shows you an interesting concept. The customer experience really serves as a collection of touch points. Some customers interact with all these touch points. Some customers interact with only one. The net of this is all of their experiences, good and bad, form their perception of our businesses. That is not always an easy thing to do, because while you may have one part of your company that's organized, the customer service team, for example, interacts and does everything possible, but another interaction that customer may have may be with supply chain.
I ordered it, the customer service rep said I could have it tomorrow, there's a breakdown on the supply chain system, all of a sudden it's not there tomorrow. We've broken a promise to that customer, it can feel a little bit disjointed. The reality is sometimes it can look and feel like this. When we think about the role that technology is playing, it's about connecting all of the dots that forms the perception a customer has about us. Think about that in your own personal life. Usually, I think about it in the terms of personal relationships. You remember the fights, you don't always remember all the great times. Think about in the context of a great restaurant. You may have been going to your favorite restaurant for the last 10 years.
You have one bad experience at that restaurant, that's what sticks in your head. The bar has risen. It is our job to reduce friction from the ways that our customers are interacting with us. You heard this morning, we are breaking down silos internal to our company and our business units so that we can realize the power of GPC. Digital and overall technology innovation is sort of a behind-the-scenes enabler for how we're actually doing that. Let me give you a little bit more detail. The top line is we are absolutely evolving. One of those examples you heard Rob Cameron mention earlier, the digital center of excellence. Approximately 5 years ago, we established a digital center of excellence for Genuine Parts Company.
It is an internal organization that serves essentially as an internal consulting group that serves all of the businesses around the world globally. That means we have built capabilities that we previously did not have within the company. It also means that we took some of those silos and broke down the walls and organized them into a 1 central team. When you think about the skills you need or the capabilities and processes you need when you think about digital transformation, it starts fundamentally at things like product catalog. It involves things like pricing. It involves certainly e-commerce, serving that customer anywhere, any way, any time they want to be served. It involves digital marketing, and it involves customer experience. As I said at the beginning, putting that customer at the center and understanding their specific needs has been really important.
One of the first things we did when we established the digital center of excellence was we made the choice that it was possible to have e-commerce software that every single business unit could benefit from. Again, that's fairly tactical, but the idea of being able to leverage common software and have our business units learn from each other, leverage a shared services team here at headquarters, has been very, very powerful. Here are some specific examples. We first started with our NAPA U.S. retail site, NAPAonline. We used the software that we built as a starting point and stood up a new NAPAonline to continue to grow our retail business. You heard Kevin mention the importance of growing our retail business. That certainly has proven true with what we've seen from the early success of NAPAonline.
Shortly after that, we decided to use the exact same not only software, but the same code that runs that website to stand up the retail website for NAPA Canada. napacanada.com now uses the same technology. That's just one small example of breaking down some of those silos, where we now have a platform in place that we feel like all of our business units can leverage. Extending that a little bit further, we're using the exact same software in Australia. You heard Rob mention the B2C website for Repco. That's also using that same technology. You can see how over time, we build up a center of knowledge and expertise to not only leverage the same software but continually improve how we're using that software.
In the case of NAPAonline, through Repco, you have seen the cost of implementation only go further and further down because we've learned the best practices and we've learned how to drive those results. The other thing that we have done by leveraging that approach is that we have a common system for how we're measuring the success. The role that analytics plays is critical. Digital allows you to make real-time decisions. If something's not working, you can make an adjustment, and all of a sudden, you now have that implemented into the field. That's been a really important part too, that we have a shared analytics team that is sharing this is across all of the business units. Some of the work that we're doing for an industrial and business products, as an example, is leveraging some of our digital marketing capabilities.
Back to the idea of talking to your customers and communicating to them anytime, anywhere, any place, digital marketing is really important. Email marketing, it sounds very tactical, but being able to do that efficiently makes a lot of sense for GPC's businesses. Sharing those best practices across digital marketing and analytics has made a huge difference. That's an example of some of the digital capabilities that we have built. The last two points on this slide, strategic alignment, it's not just if you build it, they will come. It's really important to align with the business strategies from the gentlemen that have been on the stage today to understand what are the fundamental drivers in their business, so that we can then figure out what role does digital and broader technology play in helping build those strategies.
We really have partnered over the last several years to align very closely in our strategic planning so that we pick the right types of efforts to focus to deliver the most result. The last thing I'll mention before bringing Greg back on stage is the idea of being nimble. Very tactically, our technology teams have had to learn a new way to deliver value. Some of you may have heard of agile development. The basic idea there is instead of spending months building software and maybe getting it right, you actually change the way that you engage with your business users and your end customers and show them progress along the way. The way that we are leveraging technology to deliver value has fundamentally changed. We're trying to deliver value much faster and in a much more integrated way.
Hopefully, those examples give you a few details of how we are evolving, and I'd like to bring Greg back to the stage to walk you through some more.
Thanks, Rob. I'd like to expand on Rob's examples of how we're evolving and the increasing relevance of technology, not only with a focus on our traditional core responsibilities of providing hardware, maintaining reliable and secure systems, troubleshooting, processing reports, and focus on cost reductions, to name a few. Also, we have evolved to become a strategic business partner with the business on the new imperatives of improving customer experiences, growing revenues and margins, optimizing operations, and empowering our employees. I'd like to share with you some of the key efforts that we're doing in technology to try to drive those two imperatives. In the past, we've operated IT primarily at the subsidiary business unit level. As we've evolved, we're taking a more global, enterprise-wide approach to it. We are leveraging our size to improve our partnership at a higher level with our vendors and our service providers.
We want to do that to ensure that we're at the forefront of ideas to serve our customers, to influence the direction that they're taking with their products. Similar to what we're doing with global sourcing, we're leveraging our global size to increase our purchasing power as we go to market to buy hardware, software, and labor. With the fourth industrial industry capabilities, data is a growing asset that we're focused on leveraging. We are making investments and accelerating the use of data to make real-time decisions and better understand how those decisions impact our performance. Some specific areas of focus that we're focused on are sales forecasting improvement, pricing, promotions, and inventory. This is helping us sell more at higher margins and by having the right part in the right place at the right price at the right time.
We're also working to improve our supply chain connectivity by tying our facilities, inventory, and processes together and making it easier to say yes to our customer. This includes inventory visibility across all of our facilities and Internet of Things monitoring at our industrial companies that Randy mentioned earlier. Quite frankly, other things that we might be able to use that for as well. We are working with our business unit leaders to transform our business processes with a focus on simplifying and standardizing our processes across our business units and modernizing and enhancing our software tools to optimize our operations. This includes investing in software and workflow tools that allows for the continued centralization of back office functions to leverage our scale and get the efficiency that we need out of those.
Related to business process transformation, we continue to expand our use of advanced technologies like automation and robotics in our distribution centers and robotic process automation, RPA, in our offices to automate what were previously highly manual, inefficient tasks. Additionally, we're empowering our employees with mobile tools to improve their efficiencies and related communications. We recently provided our U.S. NAPA delivery drivers with mobile devices that allows them to optimize their driving routes as well as automatically notify their customers of the progress of their deliveries. As we've expanded globally and grown by acquisitions, our technology teams are even more tightly integrated with our M&A processes, not only for due diligence and core integration, but also how to explore ways to continue to leverage our scale and our global platforms.
In all of our acquisitions, we are able to leverage our global license agreements to immediately reduce costs and provide new capabilities. A good example of how we leverage our scale, when we were in the process of making our initial investment in Inenco, we discovered that they were in the process of implementing a new standard kind of brand name ERP platform. However, we had them evaluate our Motion's eCOS ERP system, which is a best-in-class system we developed internally specifically for the use of industrial businesses. As such, Inenco is right now in the process of implementing eCOS in their business. They have got it in one of their distribution centers and a number of their branches.
A result now, Inenco has been getting not only the operating benefit that they originally intended to get by consolidating numerous older ERPs, but they are also getting a fast start with a proven system even before we complete that acquisition. In addition, in M&A, we have been able to ensure that we take a consistent approach towards cybersecurity and application rationalization in our portfolio to reduce costs as well. Our technology teams are leading the charge with innovation. To support innovation across our organization, we have formalized the tracking and communication of newer technologies and various projects. We are investing in new technologies with the potential to change our operations fundamentally with things like cloud capabilities in our IT operations and goods-to-person automation in our distribution centers.
We mentioned earlier, we are also staying informed of the use of drones to ensure when it is ready, we are ready to do that as well. We are working with Internet of Things and telematics to streamline our relationships with our customers and our partners in both our industrial and automotive businesses. As both Robs have noted, we have invested in dot-com e-commerce businesses to better understand their approach on serving their online customers and how to improve the pace of speed with them. In addition, we are participating in innovation collaborations such as Point A Center for Supply Chain Innovation here in Atlanta, founded by Georgia-Pacific. We are collaborating with our customers and our partners to explore mutual problems and issues, and then accelerate our solutions to optimizing our operations.
As you have heard, there is a lot going on, and it truly is a new day with the technology teams here at GPC. The face of our company has changed a lot in the last five years, and therefore, the role that digital and technology have to play. The most fundamental change is the fact that we are now putting the customer at the center of our decision-making. You heard almost every single business unit specifically mention the importance of customer. We think we know their needs. Are we asking them? Are we spending enough time truly understanding their needs so that we can develop the right solutions so that our value proposition truly comes to life? It is not just about product, which is very easy to focus on as a distribution company.
We have to change our mentality to focus on delivering value by putting our customer at the middle. Greg?
Yep. Yeah, our business are evolving at a seemingly faster and faster pace to stay competitive and drive results. In addition to improving our customer experience and growing revenues, in our role as a strategic business partner with the business, we're leveraging our size, and we're building on our technology capabilities to improve margins and drive a lower cost of doing business. We think technology is our ability to drive a competitive advantage. Thank you.
All right. Thank you, guys. How about a hand for all of our presenters? You all did a great job. Thank you all. The young lady on my right has been sitting over here patiently all morning, just dying to get on stage to talk about our numbers and our metrics and a little bit about where we're going. We're just a little bit behind schedule, we're gonna move through this, we definitely wanna save time for your questions. Again, I appreciate all you guys and the presenters today. You showed your number one responsibility, I think, quite clearly, and that number one responsibility is driving shareholder value. Hopefully, your takeaway today is what we intended, and that is driving our shareholder value.
As I wrap up, we talk about GPC, our company was really built on this foundation: ingenuity, innovation, and integrity, certainly to consistently deliver value to all of our stakeholders. Our goal is to build on that legacy every single day. Our mission is quite clear, they all have the same mission in every one of their businesses, that is to build a world-class service organization. As we go about that, we drive this mission, you guys can change the next slide, please. We wanna be the employer of choice. One of the presenters up here mentioned securing talent today is critical. We have got to have the best talent in every one of our businesses if we're gonna continue to stay on top. Employer of choice is critical. The supplier of choice for all of our customers really goes without saying.
Valued customer, those global suppliers, they're gonna partner with customers like GPC that can demonstrate growth, that can demonstrate differentiation, and value add in every one of their marketplaces. Goes without saying, for 90 years, GPC has been a good corporate citizen. We live and breathe that every day. It certainly gets more challenging as we get bigger and as we expand around the globe. This is absolutely a mission for every one of our businesses. Last but not least, this is where certainly a number of you come into play, we want to be an investment of choice for all of our shareholders and stakeholders, and this focus is really the core of our success. Carol.
Aligning with our shareholder objectives and driving shareholder value. As you guys know, our strategic financial objectives align very nicely with our mission to drive shareholder value. If we turn first to driving top-line growth, as you heard from many of our folks today, we drive our revenues with both an organic as well as strategic acquisition growth strategy. Cultivate our steady and consistent organic growth, we have a lot of initiatives, and they drive a greater share of wallet. As you heard earlier from Alain, as he talked about our repair facilities, AutoCare and AUTOPRO for North America. You heard from Randy talk about corporate accounts, our shops, our services we provide customers. Rick Toppin in business products talking about expanding our product line, our customer resellers, and what we do there, all greater share of wallet.
When you talk about our global store footprint, you think about Jean-Jacques, what he talked about in Europe and the consolidation and the large fragmented end markets that we have. Rob talked about it for Asia-Pac. We've significantly grown our store footprint in Australasia and continue to have opportunities there. You couple that with our digital capabilities, which you heard from all of our businesses today, common themes. Kevin Herron talked about NAPA TRACS, PROLink, NAPA Express. We talked about our connectivity. Randy talked about it with his customers that everything is built on omni-channel connectivity with our customers. We also have a very disciplined acquisition strategy, and that's helping us build on our organic growth.
As mentioned earlier, we have two big strategic acquisitions that were talked about this morning. Jean-Jacques mentioned just this morning, we closed on PartsPoint. PartsPoint is, as JJ mentioned, $300 million-plus in revenue. When we look at acquisitions around the globe, certainly we look for a good strategic fit. What really sold us on AAG and what sold us on PartsPoint is the management team. If we don't get a good management team, if we don't get a great management team, you won't find us expanding in other parts of the world. I'm pleased to tell you, we've got a world-class CEO in Cor Baltus, who will be joining GPC. The great thing for AAG, it expands our footprint into the Benelux region and really gives us a nice leg up. We also mentioned Inenco this morning, and we know Inenco quite well.
We've been working alongside that team for 2 years as a 35% investor. We knew all along it was our goal to get that to the finish line and close that business. They have performed incredibly well the last couple of years. You heard Greg mention that we've already begun to implement our ecosystem over in Australia. I was there just a week ago, and we were thrilled to stand in front of all their associates and announce that Inenco is now a part of Genuine Parts Company. Roger, we're glad to have you here as part of our team going forward. Those are a couple of our big acquisitions that we're really pleased to announce here today. Carol.
We're also focused on improving our operating margins, and we've got to improve that through gross margin as well as expense reduction initiatives. We expect to grow our gross profit dollars and to improve our gross margin with both buy-side and sell-side initiatives while also reducing our operating costs. Those efforts reiterate the important work that you heard this morning that was talked about with Scott Leprohon, Greg, and pricing strategies to help us compete in this changing market. We've had to rapidly change to changing market conditions that include the current inflationary environment as well as tariffs that Scott talked about. Additionally, our supply chain initiatives and related to procurement synergies and everything we're doing with our global partners, helping to improve our gross margins.
Lastly, as Greg mentioned, we talked about Point A, and again, an organization led here by Georgia-Pacific and other Atlanta-based companies. It's an organization that help us going to get solutions quicker for supply chain and logistics. It's just another great example of ways we're going to drive our gross margin improvements. When we look at the expense side, we also look at things that we're doing in technology to help improve our operating expenses. Those can be automation in our warehouses, like we talked about earlier, shared service automation, various back-office automation, and other IT initiatives. Also, we talked about facility consolidation. Both Scott Sonnemaker and Kevin talked about warehouse automation, facility consolidation, and rationalization. Then there's a variety of other expense initiatives that we look at.
When you think about Scott Leprohon, and he showed the map of China and our different DCs and what we're doing on mixing containers, all things around freight and technology like you saw at the store visit yesterday. We'll continue to execute on these and other initiatives to improve operating results as we look ahead. We also remain very focused on maintaining a strong balance sheet and generating equally strong cash flows. We made significant progress in 2018 improving our working capital. When you look at our increase in net income as well as our working capital improvement, we generated cash from operations of $1.1 billion, and we're planning for similarly strong numbers in the years ahead. Strong cash flows play an important part in supporting our effective capital allocation. Our key priorities for capital allocation include reinvestment in our businesses.
That is our capital expenditures, which will be around $300 million for 2019. That includes reinvesting a large, significant portion of our tax savings that were generated two years ago. Acquisitions, which we have discussed throughout the morning today, our dividends, which we discussed earlier, as well as share repurchase. GPC has paid a dividend every year since going public in 1948. We've increased the dividend every year since 1955. As Paul said earlier, in 2019, it was our 63rd consecutive year of an increased dividend. This puts us in an elite group of companies known as Dividend Kings. If you combine the dividends with our cash used for our ongoing share repurchase program, GPC has returned $2.75 billion to our shareholders over the last five years.
As we begin to wrap up, a couple of other key points we want to hit you with here today, certainly all things around giving back to our local communities. We do pride ourselves as a company with a purpose beyond just the numbers. Giving back to our communities is key in every one of our businesses, no matter where we are in the world, along with demonstrating really sound ESG, environmental, social, and governance initiatives.
Giving back to our communities, GPC and its 50,000 employees continue to share their time, their talent, and their financial resources to make a positive impact on all our societies. We partnered with many charitable organizations, which have proven with our help that we can make a difference. Several of these organizations are listed here, but there are many others that we support around the world in our various businesses. Our founders built this foundation for these efforts, and we're very proud to sit here and continue their legacy of making a difference in the world that we live today.
Doing the right thing, it's key to GPC. It's key to our associates around the world. We definitely want to talk to you a little bit today about all the things that we're doing around sustainability. We published last year for the first time our corporate sustainability report, which we have copies of in the back of the room. We'd hope you would all take one of those with you. It encompasses really the proper balance that we're looking for as we expand around the world. Certainly all things about our environmental responsibilities, safety, wellness, community involvement, and ultimately our economic success, which is going to serve to help protect our most valuable resources, certainly our people and our communities and our planet. We expect our commitment to make a real difference in the years ahead.
If you take all these things that Paul started with and talking about what our mission is and all the things that we want to accomplish, we come back to what are our key long-term annual objectives. As we've had in the past, to grow our top line 6%-8%, which includes a few points from acquisitions, and that's very consistent with the 10-year history that we showed you earlier. Continuous improvement in our operating margin, which is a top priority for our teams, and then EPS growth of 7%-10%, which again, is very consistent with what we delivered in the last 10 years. You couple that with solid cash flows and an effective capital allocation and then maintaining a strong balance sheet, which has been a hallmark of GPC.
In summary, I think I can speak on behalf of all of our associates that are with us today and thank all of you for taking time to join us here in Atlanta. I hope you all leave here with a real better sense of our company, a better sense of the talent that we have around the world driving our business. Hopefully, we've articulated those four key objectives that I started this morning's discussion out with. Just as a reminder, those were giving you a bit more insight as to who we are. GPC has changed quite a bit over the last few years. How we drive value in all of our business. One of our objectives was certainly to showcase our strong management team that we have around the world, and I think this entire team did a terrific job.
We wanted to update you on our progress towards both our operational as well as our financial goals. Finally, we wanted to give you a very clear understanding of Genuine Parts Company as a differentiated investment. Today GPC represents, and I stated it when we started this morning, what I call the new GPC, represents a culmination of a lot of planning and significant investment in our business over the last several years. And while we are not done, and I don't think we'll ever be done, I believe these efforts have positioned us quite well for what I believe will be enhanced profitability in the years ahead. Again, I want to thank all of you for spending time with us here this morning and listening to the GPC story. We appreciate the time you took.
Now, at this point in time, I'm going to ask these folks to join me up here. You guys proceed in an orderly fashion and bring your stools up. We're going to open up the floor. I think we've got a couple of mics that are rotating around the room. Sid, where is Sid? Here he is right here. Go ahead, Sid.
Thank you very much.
Take charge, man.
All right. Great job by everyone. Don't you think another round of applause for these guys? Much good information, and we know this is the part that is near and dear to your heart. You guys love to ask questions. This is your opportunity, and as you can imagine, I have to say, we do ask that we refrain from any questions related to current trends in our second quarter. We're not going to address those. We do look forward to addressing some of the questions on what you heard today and anything more strategic in that nature. We have Emily and Michelle with mics, and a question right here, Emily.
Hi, Greg Melich with Evercore ISI. Thanks, guys. I think it was a great day and was very informational and useful. With that as a setup, I guess what I would say maybe strategically, Paul and Carol, last year, S.P. Richards agreed to a partnership. Could you sort of take us through the thought process that got you there, and then also why you decided it was the wrong thing to try and aggressively push for that with Essendant, and just to give us an idea of what will be the next steps as you think about the portfolio of businesses?
We've got Rick sitting right here with us, and I thought he did a terrific job of walking you all through our S.P. Richards business, which is a changing business. Greg, you referenced, Rick referenced it this morning as well, we did set out on a plan to merge SPR with their primary competitor in the U.S., a company called Essendant. Unfortunately, we had an interloper get in between that deal. We decided to walk, I think we made the right decision. I think we made the right decision for our shareholders, I think we made the right decision for Genuine Parts Company. Our strategy, as you heard from Rick here this morning, we believe we've got a real opportunity right now.
As the last standing independent national wholesaler, we think we have a real opportunity to get that business back on a nice growth curve. Greg, I know you follow our numbers quite closely. We've had three really solid quarters in a row of incremental positive comp sales. I'm quite confident with Rick at the helm and the folks he's got in the back of this room and our further focus on our diversification strategy that we can continue that growth in the quarters ahead. Is there anything you all would add to that? No? Okay.
Right here.
Thanks for taking the question. Just first clerical one to start with. The 7% exposure to Mexico, is that all of U.S.? What's the automotive exposure? Do you know?
It's closer to 11.
10%.
It's a little higher in automotive, closer to 11.
Okay, cool. All right, bigger picture question. If I understood you correctly, kind of fascinating, but in Australia, it sounds like you're piloting using your delivery trucks to do home delivery and DIY. Is that correct?
That's correct.
How do you think about that in the U.S.? Is there something structural, like geographic density, customer travel times from urban centers your stores are located? Could this model work in the U.S., and how would that impact the economics of DIY sales? It seems attractive relative to your branch footprint. Where you're not in the type A locations.
Go ahead, Kevin.
Yeah, I'll take that, Chris. We absolutely are exploring that along with third-party deliveries for retail customers out of our stores going forward.
Got you. Anything from the pilots in terms of economic impact, in terms of margin rate?
I don't know that we're in a position to talk about that yet. We're building out with Rob's team, the digital center of excellence, really the platform. We'll start testing that later this year.
Hey, Chris. Listen, it's a great question. Like we do in many areas of our business, we're going to see how Rob and the team do in Australia. It's a great opportunity for us to test it, see how it works. If the value is there and if we provide a value to our customers and we can make money along the way, chances are you'll see that model begin to expand globally. Right now, Rob's got a great initiative going in Australia. We'll see how it goes. We'll keep you posted.
Interesting. Thank you.
Yeah, you bet.
Bret, right here. Go ahead, Bret.
Yeah, Bret Jordan with Jefferies. A question on AAG. When you think about the payables programs that you guys have begun to put in place, is there anything, I guess, in the EU that structurally limits getting to 100+% accounts payable to inventory? Is there anything from a regulatory or a supplier standpoint?
That's a good question. In fact, we can't implement that program everywhere in Europe with no limitation. In fact, there are certain limits to our ability to implement that program. It has to be global suppliers
With whom or with which GPC already has a relationship outside of Europe. This is why we look at that on a supply-by-supply basis, but we couldn't just roll it out openly to all of our suppliers because, like you rightly pointed out, there are certain legal reasons why we can't extend payment terms over and above a certain limit.
Is there a realistic target that you could think about then with your supplier base?
Scott, do you want to answer this?
You load me into both? Thank you very much. I would add to what Jean-Jacques said in that we have centralized payables in the U.K., which benefits us as it relates to the supply chain program. We have a higher density of our purchases to European vendors, the Bosches and Schaefflers and SKFs of the world who have been slower to participate. We won't reach U.S.-caliber numbers for an extended period of time, but we expect to make systematic growth, systematic wins. We already have had some, as I mentioned in my prepared comments, and we'll continue to. I wouldn't want to build an expectation in you that it's going to look like the U.S. anytime soon. It's going to be a systematic approach.
Bret, I think it's safe to say the rest of the world, and also our industrial business suppliers, they are certainly trying to keep this one at arm's length. They look at what happened in the U.S. automotive aftermarket, and I think most are going to try to push back as long as they can in their markets to avoid going where many of these suppliers have gone in the U.S. Doesn't mean we're going to stop pushing. I think Scott's point is spot on. I don't think you will see us get to the level that we are here in the U.S. I do believe, and we're already beginning to see some incremental wins in all of those markets.
I guess if we're to segment in that case, what would Motion's accounts payable inventory be relative to the automotive?
Carol, do you have that one?
We don't. As you know, it is more traditional in automotive. Obviously, if you were to look at our automotive number, it would be much, much higher than industrial and certainly business products, and higher than it is internationally. Having said that, Motion's had terrific success. They have done a number of programs where they can push them out 10 days, 30 days, 45 days. They've got a great team that has started off with kind of round 2 of something they did a year or two ago, where they're going back out with terms because quite honestly, we have customers on the industrial side that are demanding 60-day terms. We are going back to those suppliers and saying, "This customer wants 60.
You've got to give us 60." You're going to see more incremental, month or two at a time on industrial, but automotive would be certainly more in line with what you see for the automotive peers.
Hi. It's Michael Lasser from UBS. Two questions. One is on the systems across all the various businesses. Is there a vision to have one unified system across every business at some point? Would that help with access to data and seeing patterns emerge across the various businesses?
I'll comment on two things and then maybe let Greg chime in. As it relates to financial systems and payroll and HR back office, we do have a common financial system, and there are certain areas, cybersecurity is run centrally. Certain things, we would have a common system. When we think about enterprise systems and our customer-facing systems, we don't have a plan to disrupt and change everybody's ERP. Where we can, we're taking advantage of, again, HR, back office, finance, and Greg, maybe you have a few other.
No, I think you answered that perfectly. I think the closer you get to the customer, the harder it is to have similar systems across our different businesses. Where we can do that, we will, and we'll look for those opportunities, such as the back office areas. We'll make sure it makes sense for our business.
I'll just add, too, 10 and 20 years ago, you saw lots of companies attempt to implement common systems. It's now about the data, and technology has changed so that it's much easier to share that data rather than it is the importance of having one system. APIs, et cetera, make it much easier to integrate those systems. The systems are not the most important part. It's that shared data that we can leverage and learn from. We're doing a lot of that with what I mentioned earlier about the digital analytics and being able to learn from each other across the business units.
Great point.
My follow-up question is probably for Scott or Kevin. The commercial side of the auto aftermarket's been competitive for as long as it's existed. Are you seeing any signs that it's becoming more promotional as some of your larger competitors are increasingly focusing on that side of the market? Do you think that's going to influence the market's ability to pass along the price increases associated with 25% tariffs? Thank you.
First off, I would say the market still continues to be so fragmented that I don't see that playing into it at all, and our intent is to pass along all the tariffs along all the customer channels that we serve.
I'd just add again, as four months into it, we have opportunities with new places to sell and share wallet. In my past life, that share of wallet piece is probably the area where I'm going to focus on first, is how we bundle those services. Hopefully, you all have got a chance to meet one of the four or five NAPA AutoCare owners that were out in the courtyard there. Tremendous opportunity just within what I would call a stock pond. They're great customers, tremendous opportunity to grow share of wallet with them.
Michael, I would just add to that. We don't agree with our competitors on everything, and I know you listen and are a participant in many of the quarterly calls. I think the one consistent theme you hear from each one of us, it's absolutely our intention to pass along these increases. This marketplace, for as long as I've been in it, has been pretty sane and pretty rational when it comes to pricing, because if all of a sudden we put brakes on sale, if you don't need brakes, you're not necessarily going to go out and buy them. From a pricing standpoint, it's been pretty rational. We would expect that to continue.
Emily, we got a question here from Brian Doyle. Did you still have a question?
Actually, it was Michael.
You got it covered. Okay.
Carolina
here.
All the way here.
Okay, Seth.
At the group level, SG&A has been a challenge. You guys have de-leveraged for the last few years. Some of the costs that you guys are incurring are helping drive higher sales. At what point do you expect us to turn the corner and start leveraging that SG&A?
Great question, I think we've talked a lot about our increased investments. You're seeing it in our CapEx. You're seeing some of the headwinds that we had in payroll with the tight labor market and freight. There had to be some investments, which we've talked about. What we're really liking is by driving the top-line growth, then we've had improvement in growth margins for six, seven, eight quarters now. Having SG&A flattish and being able to see the improvement on growth margins. Then, as you know, we got to have a level of comp sales to really leverage. It is, as we look out, again, with our long-term objectives, we would expect to see SG&A improvement. We've got to, again, have some of these investments as we move ahead.
Got it. No defined timeline. 2019 may or may not be the year.
Didn't Sid warn us on giving out numbers or warn me?
Hey, Seth, listen. It is very much top of mind.
Yeah.
Okay? It's an initiative we have in every one of our businesses, no matter where we are and no matter how well the business is performing, is to look at our cost structure, and in some cases, our cost structure is too high, and it is getting our full attention. Okay? Carolina, I think you had a question.
Thanks for taking my question. Just strategically, I'm thinking a lot of your competitors seem to do 150 to 200 new stores a year then supplement that with repurchases. I think it seems GPC's taken a different route in which you are more open to global transactions. Can you just talk about your decision to go down that route and what makes you most uniquely positioned to benefit from those global transactions versus your competitors? Second to that question, just talk if you have any numbers regarding some of the transactions that you spoke about today that are complete.
I'll take a shot at it. Look, we've got 6,000 stores across the U.S., another 1,500 I think we called out in many of our other markets. As you look across the U.S., somebody brought up last night that that number doesn't really seem to change much year to year, and it hasn't. We've actually, from a total store count base, have been pretty static. It doesn't mean we're not opening new stores. We're calling out some underperformers, both in our company store side as well as our independent owners. Look, you saw that slide they showed with the dots on the map. There's not a part of the U.S. where we have a significant void in our NAPA Auto Parts store base. Doesn't mean there aren't pockets where we can go in and pop in a store or two.
As we look to expand our footprint, we don't necessarily think we need a whole lot more brick and mortar here in the U.S. We look for the right partners, and we found the right partner in Australia and New Zealand in Repco six years ago. That gave us just like a shot of adrenaline to grow in that part of the world. We found the right partner in Europe, in JJ and Alistair's business back in the fall of 2017. That has now given us a real boost and another shot of adrenaline to continue to grow our store base. Carolina, I guess the way I'd sum that up is we look across the globe, not just how do we grow our store base in the U.S.
I think, again, if there's anything that I hope you all leave here with today is we are so much more today than a U.S. automotive-centric business. We're global, we're industrial, we're business products, we're going to continue to grow really around the world. I forget the second part of your question. I'm sorry.
On the buybacks and the store openings. I would maybe just comment additionally. All of our businesses build in 1%-2% a year for new growth acquisitions. It could be in Europe, as JJ mentioned, bolt-on, onesie, twosie, single-store acquisitions, or it could be a more strategic one. In the U.S., in North America, it could be Orleans that we just closed on. It could be the Sanel changeover. It could be some new stores in the U.S., but it also can be these store conversions that we're doing. Everybody builds it into their modeling and their thinking, and that's just part of our plans. Some of these more larger strategic ones, those don't come up very often, and when they do come up, we make sure it makes the right sense for the shareholder.
I think your comment on share buyback, as we said earlier, we consistently would buy in our shares. We typically buy an amount each year to offset what we issue in terms of long-term incentives. That amount, be it a million shares or so, we'll get that done each year. As we balance what other needs are, we'll definitely pivot back and forth between acquisitions and share repurchase depending on what other needs are. We'll stay steady on share repurchase, but definitely have been investing in M&A as it's presented itself for the right thing for the shareholders.
The second part of the question was just when we look at Orleans Automotive and the Belgium transaction, any numbers that you can give us or just how you think of the return on those investments, if anything?
Yes.
Carolina, good question. If we go back to our April first quarter earnings call, we had acquired at the time, Hennig, also in Europe, as well as Axis, and I think Randy mentioned that as an industrial acquisition. Those two more significant acquisitions are in our guidance. Some of the others that were mentioned today are smaller store group type acquisitions and are not considered in those numbers. You've also heard today, obviously, the closing today of an Inenco as well, or excuse me, of PartsPoint, and then looking ahead to an Inenco, right? Those numbers will be part of what we adjust and report in our second quarter earnings release in July. We've got to update you guys for that at that time.
Valuations that are all very consistent with historical acquisitions and then also consistent with our return on investment. These transactions, be it an Inenco, be it PartsPoint, be it Orleans, would all be very consistent with our traditional valuations as well as our return on investment.
[Shel], Ryan, did you still have a question? Right there, please.
Yeah, sure. Here you go. Yeah.
Ryan Mills with KeyBanc. Randy, on the P2MRO offering for the predictive maintenance, is that patent protected or are suppliers giving you exclusivity to integrate your platform within a customer's operations? Just trying to figure out the barriers for other distributors to have that offering.
Yes, great question, no, it's not patent protected by us. The manufacturers may patent protect their product specifically, we are working with about six key suppliers, some of the ones that we listed up here today that are the global suppliers. They've identified products that can predict the performance of their products. Many of those products can be used on other manufacturers' products as well. What an end customer doesn't want is he doesn't want to have to deal with six, eight, 10, 12 manufacturing companies that are producing these products and then decipher the data that's coming in from the product.
We will be the aggregator of each of these manufacturers' devices, the data that's coming in, we'll be able to be one voice to the customer as to where there's potential failure of the product in the plant. Catch it before it fails, get it replaced during a scheduled downtime period as opposed to unscheduled downtime, keep their production lines running. Does that make sense?
Yep. My follow-up is safety's tracking close to $1 billion in sales, or that's a goal to get there. Can you talk about the opportunity to leverage the S.P. Richards relationship? Is there any initiatives internally to leverage their private label offering?
We already do some of that now. We have a virtual fulfillment center in place where some of the safety products that S.P. Richards brings in, we actually can one click into their system and fulfill an order today for a Motion customer. Some of that's already taking place, yes.
Great questions.
I think it's also, we should add to that, Ryan, that we do some joint sourcing. Certainly, we're one of the largest procurers of gloves in the world. We aggregate all of our volume across all of our businesses when we go and negotiate disposable glove contracts around the world.
Right here, unless we have another one.
Chris, you took a lot of notes over there.
One second, Chris. One second. Let's do this person right here. Yes.
Thank you for having me. I'm Mitch Ingles from Raymond James. My question today is on the private label expansion opportunity in Europe Automotive. How do you see the NAPA brand perception there in Europe? To that question, what is the current % of sales for U.S. Auto private label, and how does that gross margin rate compare? Thank you.
Want me to take the Europe one?
Yeah.
The European market is different by countries, I've come to learn, spending time over there. The U.K. looks a bit more like the U.S. and is very open to private label and even Chinese product and the like. You get into France and Germany, less so. The brands are very prominent in those countries.
Our positioning of the NAPA brand will be mid-tier. We'll have Bosch at the premium level, we'll have the NAPA brand as a high-quality mid-tier product, and then there'll be potentially an entry-level product below it. It'll provide us what we deem to be differentiation, diversification in the market, and an alternative to the OE brands. Jean-Jacques talked about the strength of the dealer and the strength of the OE brands. This potentially gives us an alternative to those.
The second part of that question was about NAPA in the U.S.
Right.
What is the private label available in the U.S. and
Well, NAPA, most people don't realize it is a private label. That's 90% of what we sell in the U.S. is under the NAPA brand. Okay. Mario.
Randy.
Yes.
Look at the work. 8%, $80 billion. What are the markets that you want to be in that would expand that $80 billion?
Great question. That $80 billion that we discussed is really our core product market, right? When you look at adjacent markets such as automation, such as the conveyance solutions business, such as even industrial and safety to a large degree, it easily doubles our available potential market.
Reverse the question. You talked about how you don't lose customers because of the contracts. Has any suppliers said, "I'm going direct," in the last two or three years?
That's a good question, and disintermediation is always something that we're watching out for. So far, we haven't had any of our tier 1 suppliers that we do business with move to a direct model, except for large capital expenditures. If it's something that's much larger than we have the technical capability to sell, many times they'll go direct. We're talking 2,000, 3,000 horsepower electric motors or gearboxes the size of a quarter of this room or whatnot. Doesn't happen all that often.
Mario, Randy mentioned and Sid just mentioned the Axis acquisition, and Randy touched on it in his presentation. That whole automation space is, we find, quite attractive. It's very fragmented. It's growing double digits. Factory automation is just going to continue to take off.
Where we see opportunities around the country is how can we begin to amass more real critical scale in the automation space. You got a follow-up?
Just for the fun of it. You talk about being a great service company over the future where the U.S. economy's going to become all service-focused. Will you take your knowledge of fulfillment and logistics and use that as a business to create a new business within a fourth leg?
Hey, great question, Mario. Right now, we don't have any plans for a fourth leg. We'll never ever rule it out. There are opportunities that present themselves quite often. Right now, we've got our hands full with what we've got, but it doesn't mean we would never consider a fourth leg. Right now, we're pretty good, though. Thank you for your questions.
Right here, Mike.
Thanks. Michael Montani at Evercore. Just wanted to follow up on, first from a sourcing perspective, were the figures of 10% and 7%, was that foreign direct import only, or did it include also indirect import?
It includes indirect import.
Okay.
One caveat I'd tell you is that we've not, on the Mexican ones, that's what our cost of goods says we've imported. There's potential for component inventory and so on that goes into U.S.-produced product that may be a little broader. We don't have that visibility from our suppliers yet. As they start to call us and say, "Here's what we need to do from an increase," and we start negotiating, we'll get a broader sense. Our cost of goods today that has Mexican as a country of origin of Mexico is the 7% that I described.
Secondly, like we discussed at a high level, the 6%-8% sales growth algorithm for the company, I'm wondering if we could also delve into the lines of business while we have all the segment leaders to discuss on the organic side, kind of what they feel the opportunity is, and how much of that would be price versus volume.
I'll give the comment on price or volume, and maybe North America or a few others can give the core growth. As we think about inflation in normal times, we would have 1%-2% built in there for inflation. Now, industrial and business products easily can be a bit more than 2% this year, and automotive, again, depending on tariffs, could be. In our long-term goals, you would assume that 1%-2% for inflation would be built in there. As I mentioned before, 1%-2% for acquisitions. That leaves core growth something like 3%-4%, and the folks can speak to what they're seeing growing in their markets.
I think, Mike, that is our overarching goal in every one of our businesses. Carol just walked you through, and if you go back to that 10-year run that I showed you, more years than not, we hit those numbers. It is a combination, and I think every business unit goes into the year with looking for that core growth that we have to have the leverage. We look for that 3%-4%, every one of our businesses. A little inflation, 1%-2% M&A, and that's the formula that has worked for many years to get us to that 6%-8% overarching sales increase.
I mean, we could go down the line, but I think I can speak for all the guys. That's their mission in life.
Okay. Great question. Thank you.
Team, I think we have one-
With new questions
last question right here.
No. Sorry, Chris. Chris, we'll get you outside. I'll go one-on-one with you.
I'm sorry, Chris. [Peter Mikowitz] with Prudential Capital Group. Carol, you talked about the kind of gross margin expansion. I know last night at the store tour, it was mentioned that a lot of that's been driven on the retail side from some of those kind of extra tertiary impulse buy products. How much of the margin expansion, especially on the auto parts side, is driven from the retail business versus the more core wholesale businesses? Have those kind of continued to diverge, where the wholesale's been fairly constant on that side of things, or?
Well, I'll give you some overall comments, then maybe Kevin, you can add in on the gross margin. Our gross margin, we've had improvement in our North American automotive, that's been for 2 quarters, that's been both on the commercial and the retail side, if you will. Kevin can talk a little bit about some of the buy side and sell side because remember, retail is only 20% of the U.S. business. Also, as volume has gone up, you have additional volume incentives and volume rebates, and our industrial business has added to that improved gross margin as well. Some of it is our investments in our technology pricing data analytics, and I think Kevin could maybe speak to 2 things or Scott.
Please.
Yeah. Look, you're dead on. Obviously, we enjoy a higher gross profit with our retail business, but as Carol said, it's only 20% of our business across our corporate store network. We've reinvested in pricing teams over the last 18 months to really drive and take the data analytics that Rob talked about earlier to help us optimize that price. We're not seeing big pressures on our commercial side. Gary Dunwell, who leads our merchandising team, will continue along with Scott's team on the buy side of things. We see both of those being critical to margin enhancement.
I'd just add to that, pricing analytics investment that we've done is not just a retail focus. That's retail and commercial. I've been very impressed with kind of the talent level and the strategies behind what we're going about there.
One second question. Like we talked about with things going more digital, more online sales, what percentage is kind of the current portion of just overall orders coming in online versus kind of the traditional shop calling in or on the industrial side as well? Is there kind of a goal or, not necessarily a goal, but a general forecast for where that might be within the next few years?
I'll take it, only on the premise that Kevin's going to clean it up if I get it wrong. We're at 40% commercial. This came up in the store visit yesterday a couple of times. 40% on our commercial business for our corporate-owned stores, we really control it through PROLink. It's gaining 5%, 6% every year, at least it has in the last few years. I would imagine that would continue, especially as we add more features and benefits to PROLink. That's predominantly where it's at. The NAPAonline continues to grow, and on that retail side, the idea is NAPAonline and keep pushing those consumers into the store for buy online, pick up in store. Is that fair, Rob?
Yeah. I would just add, we see channel shifts happening in all of our businesses. What I mean by that is digital sales is outpacing traditional sales. That does not mean that we're replacing humans. That means that humans need to focus on developing deeper, better relationships to serve those customers that still want to engage with us, either face-to-face or via phone. We just need to build the right platforms that serve what their needs are. Sometimes it could be PROLink is, for example, is our B2B platform. 95% of those orders are those hotshot orders. The repair shop, I need a part, 20 minutes. They are actively working on cars that are already up in bays. They don't have time to be on the phone.
We need to provide them not only, I can get to the part in 20 minutes, but if I don't have it, when can I next get it? Is there a shuttle available in three hours? Can I get it from another store or another DC? That cross-inventory visibility, we're seeing tremendous growth in those channels. Again, same thing with NAPAonline. We just want to be able to say yes without a phone call. Providing all the systems and the connectivity to be able to give the customer information about how much it's going to cost, what's the shipping, when am I going to get it, those are the basics that we have to break down some of those silos to make sure we're doing.
The industrial side's a little different. We don't have a B2C arrangement where we sell much to the consumer, it's almost all B2B. What happens is they'll go to our dot-com site in more cases than not to identify product, look for product. Once they find it, they move off the dot-com site and go to the EDI connection, and they'll place the order electronically through our direct connection. Right now, about half of our orders are coming through a digital connection, if you will. As I mentioned in my presentation, the phone just doesn't ring much anymore like it used to, right? Everything's happening computer to computer. That's the trend, and it has been going that way for some time, and we expect it to continue to go that way.
Peter, just the last part of that question, you said, do you have a goal? Our goal is to continue to increase because look, the more that comes across electronically, the less people we have on the backside answering phones and the like. It's very productive for us.
Thank you.
Right.
Rick, to round it out, I'm assuming the same is true with business products.
Yeah, in our office channel business, we're well over 90% digital already, and that market moved many years ago. The JanSan channel is a little bit slower, they're developing as well.
Super. With that, I think we're going to close this session, and I'm going to turn it back to Paul. Of course, we thank you guys, and I did want to remind you that the shuttle is leaving for the airport at 12:45 P.M. We do encourage you to take the time, talk with us some more, see the displays. There's going to be some food out there. Grab a box lunch on your way out. Don't miss that opportunity. Thank you again.
My closing comment's very simple. Thank you all for being here with us today, but I also want to make sure I thank this guy right here on my right who has no template for Analyst Day. He's done a great job.
Thanks, Rick.
Yeah. Thank you to all the support group that's been behind this. It's quite an endeavor, as you all can imagine. It's our first. I don't think we'll wait 90 years to do another one. Again, we appreciate you all being here, and thank you.