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The Auto Parts Business Is Booming And Might Not Be Slowing Any Time Soon
The Auto Parts Business Is Booming And Might Not Be Slowing Any Time Soon-May 2024
2024-02-19 EST 22:12:21

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AutoZone last month up 15 percent in February for its fiscal quarter ending then, while O’Reilly that it had the best quarterly same-store sales growth in company history. It’s very good, at the moment, to be in the auto parts business.

The reasons are somewhat obvious, in that there is a pandemic, and the economy isn’t doing great, and people are pretty uncertain where their next dollar will come from. Keeping what you have running makes a lot more sense than buying something new or even used.

Or as Randy Pindor, president and CEO of PB Blaster, the penetrant brand, recently, “Every time there’s a sputtering in the economy we see an increase in sales ... [Customers are] not buying new, they’re working and fixing.”

Yesterday, The Wall Street Journal a few more reasons why this trend may continue. That’s even as more people get vaccinated, more cities and states start to reopen, and the economy (it is hoped) improves.

For one, traffic still isn’t back to pre-pandemic levels. Once more cars return to the road, it is likely that there will be a rotation in the categories that perform well. AutoZone had noted that brakes and rotors weren’t selling as well in its most recent fiscal quarter because cars were on the road less; that should come back as traffic recovers fully. The harsh winter weather seen earlier this year should mean more maintenance and repairs are needed on many vehicles, which could help boost sales throughout this year after two consecutive years of mild winters, O’Reilly said during its earnings call.

Plus, the nation’s already-aging car fleet could become older even faster due to the ripple effects of the semiconductor shortage that is limiting the supply of new cars.

The WSJ story doesn’t really go into it, but I’d guess that and a seller’s market for used ones also has a lot to do with this.

Speaking from my own experience in New York City, the AutoZone a couple of blocks from me is constantly packed. Beyond the DIYers, good luck finding a repair shop that isn’t just as busy, same with the 10-minute oil change joints, and even the detailing shop I went to earlier this week. The good part of all of this, of course, is that it’s keeping a lot of people employed.

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