MOTORCAR PARTS OF AMERICA INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

MOTORCAR PARTS OF AMERICA, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Dear Valued Shareholders:

Fiscal 2024 was a period of meaningful accomplishments for Motorcar Parts of America – particularly with regard to strong cash flow generation, the pay down of net bank debt and other initiatives focused on enhancing near- and long-term shareholder value. Highlights include:

Our strategy moving forward includes four major initiatives: 1) to grow sales in all product lines with an emphasis on our branded products, 2) increase gross margins, 3) neutralize working capital, and 4) continue to enhance cash flow generation.

With respect to sales, we have secured large commitments for new business for our three largest product lines and our rotating electrical diagnostic business. In addition, we have ongoing smaller sales gains in most of our product lines. Our focus is on maintaining industry leading service levels for our customers and providing value added services along with superior quality products. Of significant importance, besides gaining market share in all our product lines, we are focused on building national recognition for our professional installer line, Quality Built. This business increased 40% over the past two years. As we increase our share in these key professional installer categories for any one product line, it will enable us to sell our other categories, leading to additional overhead absorption and margin accretion.

With respect to margin accretion, we are focused on two areas: firstly, reducing costs, through efficiency improvements and secondly, on increasing our average price point. Most recently, we reduced our workforce by finalizing the relocation of our Torrance remanufacturing and warehouse facilities, resulting in annualized savings of approximately $7 million, with $6 million to be realized immediately. In addition, we have identified opportunities

for significant margin accretion in our fast-emerging brake product lines. We believe this margin accretion will result in a significant increase to EBITDA. We are continuously evaluating the impact of inflation and interest rates, trying to mitigate these forces with appropriate efficiency improvements and timely price increases.

The neutralization of working capital will continue to be a key area of focus moving forward. As highlighted above, we instituted a vendor supply chain financing program in Fiscal 2024 designed to extend payment terms, while improving cash flow for both valued vendors and the company. The reduction of working capital from this financing program -- coupled with margin accretion from less mature brake-related products and better overhead absorption through increasing volume -- will support growth and additional opportunities to enhance shareholder value. To date, we have added a net 30 days to our days outstanding -- which should reduce working capital by $20 million. While we have had great initial success, we believe this opportunity will add further meaningful value.

All these initiatives, when coupled together, will result in a continual increase in cash generation. We expect cash from profits as well as working capital enhancements.

In short, as Fiscal 2025 evolves, we expect to gain further sales momentum and profitability. Our financial strength, highly regarded product offerings of non-discretionary aftermarket parts and solid customer relationships distinguish our company. Equally important, recent record heat levels throughout the country will certainly contribute to increasing demand as drivers hit the road and parts fail and wear out. We are dedicated to being the industry leader for Parts and Solutions that Move our World Today and Tomorrow and confident in our ability to capitalize on our sizable infrastructure, global footprint, capabilities and expertise.

Our Industry

We are fortunate to operate in an industry that has exciting fundamentals with a predictable future. According to recently available data, there are 289 million vehicles on the road in the United States with an average age of 12.6 years. Along with these increasing car parc statistics, vehicles travel approximately 3 trillion miles per year. Each of these vehicles have critical non-discretionary components that will need replacement due to wear or failure. These statistics grow exponentially when considering the global markets where the car parc exceeds 1.4 billion vehicles.

Our industry is serviced by Original Equipment car companies; three large automotive retailers; and a large network of professional installer distributors. Many of these distributors have a retail presence in their model. We have excellent distribution with a number of OE car companies for their warranty replacement and aftermarket branded offering. In addition, we supply all the retailers and many of the large professional distributors with one or more of our product lines. We have the opportunity for growth within our existing customer base and with new customers. The potential in the United States alone for our product lines is approximately $8 billion at manufacturers sales price, and exponentially greater on a global basis.

Our company has state-of-the-art worldwide leading factories that produce non-discretionary parts for substantially all the car parc. In addition, our factories are now positioned in global low-cost locations. We have cutting edge facilities in Malaysia, Mexico, China, India, Canada and the United States. We can leverage these factories which operate with industry leading manufacturing, quality control and distribution capabilities and know-how, to capture significant market share. Firstly, in the North American marketplace, we have very strong customer relationships and recognition -- leading to other markets throughout the rest of the world. This is evidenced by our recent very early success in the Mexican aftermarket. This strategy is also closely aligned with our existing customer base who are expanding their businesses globally. Our current share in our legacy rotating electrical business in the USA is an industry leading 49%. These products continue to grow and are in particular fast growing in Canada and Mexico. We also have a strong presence in thearound the wheel and brake industry. We have recently opened up a new wheel hub factory in Malaysia to enable us to ship customers worldwide directly from this facility, representing a cost-saving considering the impact of relatively smaller imposed tariffs on Malaysian goods.

Over the past few years, we have aggressively expanded our hard parts offering to the brake business. These opportunities have been developed by evaluating the significant growth opportunities, the return on invested capital and knowledge that this category is for the most part technology agnostic. At the initial stages of startup for these product lines, it is natural that margins would be reduced. However, it is our thesis that as we gain share, the opportunity to enhance these margins is real. We are fast approaching inflection points across most of our business to increase margins -- despite continuing inflation headwinds. While we are still in the early stages of proving out our thesis for our brake business, we are convinced that we have an excellent opportunity and that it will result in significant profit and cash flow growth.

We remain focused on our current product offerings and believe growth from these lines will sustain us for years to come.

Committed to the Environment, Social and Corporate Responsibility

Our environmental focus remains an important priority throughout our organization, as we are constantly seeking ways to better manage resources, improve operating efficiencies, and encourage conservation. The automotive aftermarket parts industry has inherent energy-savings benefits compared with the requirements to produce new parts. For example, the remanufacturing process enables us to repurpose a variety of parts and components, utilizing rigorous testing and analysis processes. I might add that we recycled more than 41.8 million pounds of metal scrap, paper and plastic items in Fiscal 2024.

Our state-of-the-art distribution facility is environmentally friendly, serving multiple categories and capable of shipping multiple product lines from a single, low-cost location. This enables our customers to combine purchase orders for different product lines. This capability also allows our customers to reach minimum order levels more easily, while minimizing LTL (less-than-a-truckload) shipments and leveraging freight costs.

We recently completed an energy audit of our 1.1 million square feet facilities in Mexico and are proud to report that the auditors found our systems to be top notch. We will be implementing the auditor recommendations over the next few years to further enhance our energy footprint. To further reduce our environmental footprint, we utilize a highly efficient electric battery charging system to power forklifts. It employs a self-diagnostic design to achieve optimal recharging levels and minimal operator input, requiring significantly less floor space due to its vertical-station design.

We are also passionately committed to social responsibility, including proactive health and safety initiatives to protect employees, offer subsidized food programs, donations to community organizations, sponsorships of sport teams and weekend family events.

With regard to corporate responsibility, we are engaged in a refreshment process of our board. This process, based in part on constructive feedback from shareholders, is ongoing. Our new candidates offer a variety of skill sets, including industry knowledge, corporate governance, public company experience and financial acumen. I look forward to fresh ideas and input from these directors and our renewed board membership.

To reiterate, we have built a scalable platform for growth, with exciting and meaningful opportunities to enhance shareholder value. We greatly appreciate your ongoing support and confidence in our vision.

We are proud of our accomplishments and look forward to reporting further milestones in the quarters ahead.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held On September 5, 2024

To Our Shareholders:

We will hold our annual meeting of the shareholders of Motorcar Parts of America, Inc. (the “Company”) on September 5, 2024, at 10:00 a.m. (PT) at the offices of the Company at 2929 California Street, Torrance, California 90503. As further described in the accompanying proxy statement, at this meeting we will consider and act upon:

Our Board of Directors (the “Board”) has fixed the close of business on July 16, 2024, as the record date for the determination of shareholders entitled to vote at the meeting or any meetings held upon adjournment or postponement of the meeting. Only record holders of our common stock at the close of business on that day will be entitled to vote. A copy of our Annual Report on Form 10-K for the year ended March 31, 2024, that we filed with the Securities and Exchange Commission (the “SEC”) on June 11, 2024, and the Form 10-K/A for the year ended March 31, 2024, that was filed with the SEC on June 28, 2024 are enclosed with this notice, but are not part of the proxy soliciting material.

We invite you to attend the meeting and vote in person. If you cannot attend, to ensure that you are represented at the meeting, please sign and return the enclosed proxy card as promptly as possible in the enclosed postage prepaid envelope. If you attend the meeting, you may vote in person, even if you previously returned a signed proxy.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on September 5, 2024.

Our proxy statement and our Annual Report on Form 10-K for the year ended March 31, 2024, that we filed with the SEC on June 11, 2024, and the Form 10-K/A filed with the SEC on June 28, 2024 are available at https://materials.proxyvote.com/620071 and are first being made available on July 26, 2024.

By order of the Board of Directors

Juliet Stone, Secretary

Torrance, California

July 26, 2024

YOUR VOTE IS EXTREMELY IMPORTANT

In order to assure your representation at the Annual Meeting, you are requested to vote, at your earliest convenience, by any of the methods described in the accompanying proxy statement. If you decide to attend the Annual Meeting and vote in person, any previous vote by proxy will be revoked automatically and only your vote at the Annual Meeting will be counted.

YOUR vote is extremely important.

If you have questions or need assistance voting your shares, please contact:

1407 Broadway, 27 th Floor

New York, New York 10018

proxy@mackenziepartners.com

Call Collect: (212) 929-5500

or

Toll-Free (800) 322-2885

Your vote is extremely important, no matter how many or how few shares you own. Even if you plan to attend the Annual Meeting in person, please promptly sign, date and return the enclosed proxy card in the enclosed postage-paid envelope by following the instructions provided on the enclosed proxy card to be sure that your shares are voted at the Annual Meeting.