Mar 18, 2015 at 18:05 o\clock

5 Reasons To Invest In Auto Parts Stocks

5 Reasons To Invest In Auto Parts Stocks

The automotive industry is one of the largest industries in the U.S. It can be considered the second largest industry after the real estate industry.

From a global perspective also, the auto industry is significant for economic growth. Outside of the U.S., all the other major economies of the world including Canada, India, China, Brazil, Germany, Japan have big auto industries. In fact, of the G-20 countries, only Saudi Arabia does not have automobile production according to industry data.

Sources: U.S. Department of Labor, U.S. Commerce Department, Auto AllianceInvesting in auto sector stocks is a wise move given the details noted above. However, instead of investing in auto makers, investors are better off going with auto parts makers for a many reasons.

In the U.S. auto sales has rebounded strongly since 2008-09.

Source: Auto AllianceAutomakers are expected to announce February sales figures on March 3rd. But according to - - estimates by, the February sales is projected to be up by 1.1% over the same month last year making it the best February sales since 2008.

With the economy recovering, auto lending should increase further. Auto lending and auto sales are highly correlated since most folks buy cars on loans. In fact, even subprime lending standards are projected to decline this year leading to higher auto sales. Lenders are - - able to take advantage of ultra-low interest rates despite higher than normal default rates.

While public transportation is good in bigger cities such as New York, DC, Chicago, etc. in other cities and towns across the land public transportation is virtually non-existent. In rural areas there is no public transportation at all. Hence autos will not disappear any time soon and will be the main mode of transportation for the foreseeable future in this country.

The interstate highway system, the hotel industry, the fast food industry, the malls, the ubiquitous suburbs in every city are all built around cars. Public policy and government investments also favor the continued dominance of the car industry. Even during the height of the great recession billions of state funds were spent on highway development, maintenance and expansions and not on alternative means of - advanced auto parts coupons - transportation such as building subway systems, trams, trains, etc.

The company's stock has more than doubled in the past 12 months.

Denso is the world's biggest diversified auto-parts maker based on sales.

Autoliv Inc NYSE:ALVCurrent Dividend - - Yield: 2.16%Country: SwedenNote: Dividend yields noted above are as of Feb 28, 2014. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.

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