Executive Briefings

As Economy Stalls New-Car Sales, Auto Parts Dealers Ramp Up to Meet Heightened Demand

Shares of automotive parts retailers like AutoZone and O'Reilly Automotive continue to surge to record heights, as consumers who have held off buying new cars spend more to maintain their old models.

From 2000 to 2007, new car sales averaged 16.8 million per year in the U.S., according to Commerce Dept. data. By contrast, on Nov. 3, new data showed cars and light trucks were sold at a seasonally adjusted annual rate of 12.25 million in October, up from 11.73 million in September. The worst of the sales slowdown was a 35 percent drop from 2007 to 2009, when the 10.4 million vehicles sold were the lowest total since 1982.

As Americans buy fewer new cars, they are spending more to maintain existing vehicles, analysts and executives say.

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Shares of automotive parts retailers like AutoZone and O'Reilly Automotive continue to surge to record heights, as consumers who have held off buying new cars spend more to maintain their old models.

From 2000 to 2007, new car sales averaged 16.8 million per year in the U.S., according to Commerce Dept. data. By contrast, on Nov. 3, new data showed cars and light trucks were sold at a seasonally adjusted annual rate of 12.25 million in October, up from 11.73 million in September. The worst of the sales slowdown was a 35 percent drop from 2007 to 2009, when the 10.4 million vehicles sold were the lowest total since 1982.

As Americans buy fewer new cars, they are spending more to maintain existing vehicles, analysts and executives say.

Read Full Article