Exploring the 3 Auto Stocks Gaining Traction

The automotive industry is well-poised for significant profitability this year and beyond, driven by strong consumer demand and improved supply, rapid transition to EVs worldwide, and growing technology integration in the auto manufacturing processes.

Given the industry’s tailwinds, it could be wise to invest in fundamentally sound auto stocks Bridgestone Corporation (BRDCY – Get Rating), LKQ Corporation (LKQ – Get Rating), and Modine Manufacturing Company (MOD – Get Rating) for solid returns.

According to an estimate from research firm Wards Intelligence, for the first half of 2023, U.S. new-vehicle sales grew nearly 13% year-over-year to 7.7 million, fueled by pent-up demand from almost two years of short supplies.

Moreover, the surge in demand for Electric Vehicles (EVs) has led to a paradigm shift in the automotive industry. In  2022, electric car markets saw exponential growth as sales exceeded 10 million. The share of electric cars in total car sales has more than tripled in three years, from around 4% in 2020 to 14% in 2022.

EV sales are projected to continue its momentum through this year. Nearly 2.3 million electric cars were sold during the first quarter, more than 25% in the same period of 2022. By the end of 2023, around 14 million electric car sales are expected, representing a 35% year-over-year increase, with new purchases accelerating in the second half of this year.

Furthermore, the growing integration of digital technologies like IoT, AI, and blockchain is revolutionizing manufacturing processes in the automobile industry. For instance, predictive maintenance using IoT sensors reduces downtime, while AI-driven analytics optimize production efficiency.

As per a report by Market Research Future, the auto parts market is expected to reach $755 billion by 2026, growing at a CAGR of 7.5%. The growing interest of auto owners in improving their vehicle’s performance in terms of exhaust sound, speed, and appearance parameters is a primary driver of the market.

Also, the digitization of auto parts delivery sales and services should drive the market’s growth.

Given the industry’s promising growth prospects, quality auto stocks BRDCY, LKQ, and MOD could be solid additions to your portfolio.

Let’s take a closer look at the fundamentals of these stocks…

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