Increased demand for vehicles and escalating technological advancements within the automotive industry could steer the auto parts industry toward a promising growth path.
Therefore, auto parts stocks Modine Manufacturing Company (MOD – Get Rating), Garrett Motion Inc. (GTX – Get Rating), Hyster-Yale Materials Handling, Inc. (HY – Get Rating), Miller Industries, Inc. (MLR – Get Rating) and Gates Industrial Corporation plc (GTES – Get Rating) could be solid buys now.
Before diving deeper into their fundamentals, let’s discuss why the auto parts industry is well-positioned for growth.
The auto parts industry will likely benefit from U.S. new vehicle sales growth this year. According to the National Automobile Dealers Association (NADA), total new vehicle sales for 2023 are expected to be 15.4 million units. Globally, sales of new vehicles are expected to reach 86.8 million units, surpassing the previous estimate of 86.4 million units.
In addition, the International Energy Agency’s (IEA) projections suggest a 35% year-over-year surge in EV sales for 2023, reaching 14 million units. Such explosive expansion places EVs on track to capture an even larger slice of the overall car market, potentially soaring to 18% by the end of 2023.
Furthermore, the auto parts industry is set for robust growth in the long term because of the increasing demand for automotive customization, the introduction of advanced technologies like navigation systems and driver assistance systems, and the rise of e-commerce platforms offering automotive parts.
The global auto parts manufacturing market is projected to achieve a 6.3% CAGR and reach $939.21 billion by 2028.
Considering these conducive trends, let’s look at…
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