Autostock Distribution Opts Not to Accept NAGS Rebalanced Pricing - Yet

Autostock Distribution has weighed in on the NAGS Rebalancing discussion, issuing a letter to customers indicating that it is not ready to make the transition to the new pricing structure that will become effective with the NAGS Rebalancing on February 28, 2005. The company letter stops short of saying it rejects the rebalanced prices, indicating that it might accept them in the future after further analysis. The letter, as it was received by one company, follows.

Autostock Distribution

Date: February 3, 2005

To: All Autostock Distribution Trade Customers

From: Paul J. Schulte, Vice-President - Sales, United States

Subject: NAGS Rebalance - February 28, 2005

As you are aware, the new NAGS rebalancing plan is scheduled to go into effect on February 28, 2005. As an active participant in the Automotive Replacement Glass industry, we recognize the need for NAGS to take corrective action with respect to the pricing section of the NAGS price list. Making industry list prices more relevant to the level at which glass parts are actually traded in the ARG marketplace, is a laudable and in fact a necessary objective.

We also recognize that, as important as it is to have a coherent and relevant retail pricing tool, business owners and managers must also have a clear understanding of what these rebalancing changes will have on their wholesale acquisition costs. At Autostock Distribution we are all well aware of the concern and uncertainty that surrounds the soon to be effective NAGS pricing tool. Recent conversations with a wide cross section of our customers, causes me to conclude that many of you are presently unable to assess the impact these pricing changes will have on your business. This is not an acceptable situation.

Due to the uncertainty that currently pervades the wholesale and retail marketplaces, and with only slightly more than three weeks remaining until the planned rebalance effective date, Autostock Distribution has elected to make a leadership choice and temporarily postpone our movement to the rebalanced schedule. In simple terms, what this means to you is that Autostock Distribution will continue to use the current schedule (September 6, 2004) and will not be making the transition to the new NAGS schedule on February 28, 2005. The pricing you currently enjoy from Autostock will not be adjusted until we notify you in writing.

It is our hope that this action will reduce some of the current uncertainty you are experiencing and allow you to concentrate on the choices you will need to make in your retail business. We will continue, as we have been, to conduct our own research and analysis, as well as closely monitoring industry developments into the pricing tool. We anticipate making the move to the rebalanced schedule at some time in the near future, but to do so at this time is not prudent for us or good for you.

As always, thank you for your continued support.


Paul Schulte

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