The economy, in many respects, is working in LKQ Corp.'s favor.

Yes, according to Walter Hanley, senior vice president of LKQ, the drop in vehicle miles traveled (only now starting to show some signs of rebounding) has reduced the number of collisions in the United States. That has had some adverse affect on the company, which operates more than 60 wholesale auto recycling centers and about 40 self-service recycled auto parts yards around the country.

“But certainly the issues the OEMs are facing give us opportunities to sell parts when OEM parts are in an out-of-stock position,” Hanley said. “We have invested so much in our inventory and distribution network that we've got availability of parts. We're generally able to deliver them to the shop the next day so they don't have downtime, especially when the customer in a rental vehicle.”

The slump in new car sales also offers LKQ opportunities, Hanley believes.

“As vehicle owners are keeping their cars longer and they're not buying as many new cars, we think we'll get more business on the mechanical repair side,” he said. “They're going to need replacement engines or transmissions more frequently. We're not just selling collision parts; we're also selling mechanical parts.”

Recycled parts give also LKQ and its shop customers a way to tap into the growing environmental movement as well.

“We bought over 440,000 vehicles last year, and recycled the parts and sold the hulks to shredders to recycle the steel,” Hanley said. “That has a tremendous benefit to our environment. We're a green company. People don't often recognize that. It's an important ancillary benefit not just to our customers but to everyone. That's 440,000 fewer vehicles that could have been a detriment that were turned into something positive.”

The 440,000 figure is just one of LKQ's impressive numbers. It had 2008 revenues of $1.9 billion. Including Keystone Automotive, the non-OEM parts supplier it acquired five years ago, and its refurbished parts and heavy-duty truck operations, LKQ has 9,600 employees at 280 locations in four countries.

That size and scope gives it an advantage in meeting shop's needs for alternative parts, Hanley said.

“On the recycled side, for example, we have a distribution network that allows us to share inventory regionally,” he said. “If a shop in, say, Chicago calls for a part, and we have it in any of locations in Wisconsin, Illinois, Indiana or even our yard near St. Louis, we sell it to the shop, and our distribution network has overnight transfer runs. We'll get the part to the shop the next day, no matter which of those locations it came from.”

LKQ recognizes that speed and accuracy is becoming increasingly important to its shop customers.

“Insurance carriers don't want to pay for those rental cars. So being able to get the right part to the shop on a timely basis is critical,” Hanley said. “We can't be sending the wrong part or taking multiple days to deliver a part to the shop.”

Hanley said the company works to offer the benefits of working with a large company without the customer feeling like they are dealing with a large company.

“Most shops have a dedicated salesperson so they have a relationship with a person who can help them,” he said. “And we have the best warranty terms in the industry. We stand behind our parts.”

Hanley sees shop interest in recycled parts growing, particularly in the short-term as the vehicle population ages and cash-strapped motorists look for ways to make repairs affordable or to keep cars from totaling.

“Also we see insurance carriers having a more active role in the repair process and pushing for the most cost-effective parts,” Hanley said. “I think alternative parts utilization is a number that is getting more and more attention. We see more of the carriers insisting on minimum levels. I think all of that points to more use of recycled and aftermarket parts.”