Semiconductor shortages have hurt car manufacturers while helping auto parts and repair companies such as AutoZone, O'Reilly Auto Parts, Advance Auto Parts, and AutoNation. Used car and truck prices have grown 45.2% over the last year, and auto parts and repair companies have been among the primary beneficiaries.
- O'Reilly, AutoZone, and Advance Auto have all seen their stock price grow by ~35% YTD.
- AutoNation’s share price has grown 70% over the same period.
- All four stocks are trading at or near their 52-week highs.
- Despite substantial growth in the first half of the year, investors are bullish on these companies’ performance for the rest of 2021.
- While the consumer price index has increased 5.4% from last year, the substantial increase in used car prices takes place amidst manufacturer slowdowns and increased consumer demand for travel.
- J.D. Power and LMC Automotive stated Wednesday that new car sales in the U.S. will slow further in July due to continued semiconductor shortages.
- Last Wednesday, General Motors announced that it would cut truck production in the United States.
- Analysts have claimed that the semiconductor shortage could last into 2022, furthering troubles for auto manufacturers and potentially affecting smartphone and appliance production as well.