![]() Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group's earnings growth potential. The industry's positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates strong near-term prospects. The industry currently carries a Zacks Industry Rank #50, which places it in the top 20% of around 250 Zacks industries. The Zacks Auto Retail & Wholesale Parts industry is a four-stock group within the broader Zacks Auto-Tires-Trucks sector. Zacks Industry Rank Indicates Favorable Prospects ![]() In addition to that, the industry has to deal with rising commodity costs, a tough labor market and logistical challenges, which may limit margins. Many auto companies are forced to make production cuts, which in turn may result in lost revenues for auto retail parts companies. Supply Chain Snarls a Pain Point: The chip crunch - a byproduct of the COVID-19 pandemic that only got aggravated by the Russia-Ukraine war - is causing demand-supply imbalance, thereby leading to temporary hiccups for the industry. The auto retail and wholesale parts industry is chalking out a detailed roadmap to make the most out of the opportunities amid the changing market scenario. Operational Efficiency is the Key: With the transition to greener vehicles, the companies are giving utmost importance to cost management for staying ahead in the game, as investments and R&D costs are on the rise owing to the development of superior technological platforms and sophisticated tools. The race to invest vast sums in the e-commerce domain is gathering steam, propelling businesses to new heights. The launch of a simple, secure and user-friendly online platform is aiding in seamless end-to-end digitization of the companies' sales processes. Ramp-up of E-Commerce Initiatives: With the pandemic leading to wide adoption of online services, several dealers are ramping up investments in e-commerce tools, which are buoying their prospects. The introduction of more complex and high-tech vehicles has led consumers to take more professional help, thereby opening up new opportunities for the industry participants. A shift toward electric and driverless cars is spurring demand for technologically superior auto parts. 4 Key Investing ThemesĬomplex-Technology Embedded Cars on the Rise: The industry is undergoing a radical change with evolving customer expectations and technological innovation acting as game changers. The industry is a highly competitive one and undergoing a radical change, with evolving customer expectations and technological innovation acting as game changers. ![]() Vehicle parts and accessories include seat covers, antifreeze, engine additives, wiper blades, batteries, brake system components, belts, chassis parts, driveline parts, engine parts as well as fuel pumps.Ĭonsumers have two options, either they can opt for repairing vehicles on their own (the 'do-it-yourself' or 'DIY' segment) or take the assistance of a professional repair facility (the 'do-it-for me' or 'DIFM' segment). These include manufacturing, retailing, distribution, and installation of vehicle parts, equipment as well as accessories. The Zacks Automotive - Retail and Wholesale - Parts industry players execute several functions. ![]() In the light of the current scenario, auto retail parts companies like O'Reilly Automotive, AutoZone, CarMax and Advance Auto Parts should be on your watchlist to reap rewards. While global chip shortage may pose near-term headwinds, the industry is set to benefit from rapid digitization, rising demand for electric vehicles and a deep focus on cost-containment efforts. Prospects of the Zacks Automotive - Retail & Wholesale - Parts industry look promising, thanks to the growing popularity of complex technology embedded vehicles, which call for professional assistance.
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