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The Road Ahead for Auto Suppliers

Auto suppliers earnings will benefit from huge increases in production.

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The auto parts sector has gone through some painful restructuring during the past two years, but the worst seems to be over. As of April 24, North American light-vehicle production is up almost 1.5 million units year over year. Most industry forecasts are calling for continued increases in auto demand over the next few years.

Unfortunately, for investors not already positioned in the space, we think the market has already priced this recovery into current stock prices. Now that the recovery is under way, we take a look at the current sentiment among suppliers, examine where this sector is going, and offer some of our favorite names.

David Whiston does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.