As the new car market remains under pressure, the auto parts industry is benefiting handsomely from the growing demand for used cars. And because the aftermarket auto parts industry is expected to continue growing amid dwindling new car sales, we think O’Reilly Automotive (NASDAQ:), LKQ Corporation (NASDAQ:), Autoliv (NYSE:), and Dana (DAN) could be ideal bets now. Keep reading. The global semiconductor shortage has reduced the sales of new automobiles. However, demand has increased for used cars since last year as more people avoid public transportation because they fear COVID-19. The result is that used car prices have risen. The Manheim Used Vehicle Value Index shows that used car prices have risen 18.8% since last year.

Auto parts retailers will be pleased with this development. The growing market for used cars drives increased demand in aftermarket parts. This is because older vehicles need to be fixed and new parts installed to maintain their functionality. The 2021 Joint Channel Forecast Model of the Automotive Aftermarket Suppliers Association and the Auto Care Association shows that the U.S. light duty automotive aftermarket will grow more than 11% to 325 billion dollars in 2021.

Given this backdrop, we think auto parts manufacturers O’Reilly Automotive, Inc. (ORLY), LKQ Corporation (LKQ), Autoliv, Inc. (ALV), and Dana Incorporated (DAN) could be solid additions to one’s portfolio now.

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