Aftermarket Business is taking an extensive, detailed look at investments in the aftermarket. We analyze what historically has happened to shape the market, the present market performance and expectations for what is to come in the future.
A safe bet The aftermarket is a solid and secure investment
by Krista McNamara, Managing Editor
A dark horse in a down economy. Cautiously optimistic. Sporting green shoots. Many characterizations can encompass how people see the automotive aftermarket, but in one area in particular — the industry's investment environment — the depictions fall into agreement. Banking establishments, consulting firms and even the investors themselves concur, the aftermarket is and will remain a stable investment venture. Read more.
The investment community is one that is said to have a short memory. That may be true, but looking at historical economic trends can help more accurately shape the present and the future. Read more.
Minority report
Poor credit markets have increased minority deals
by Chris Miller, Senior Editor
One recent aftermarket trend that has been noted as a historical result of the poor credit market is the increase in "minority deals," according to the Capstone Financial Group. Read more.
Those we spoke with believe Cash for Clunkers indeed has had an effect on the industry's investments. Read more.
A diamond in the rough
The aftermarket's resilience continues through an economic downfall that has weakened many others.
by Krista McNamara, Managing Editor
The investment brilliance of many industries has faded as the economy has faced turmoil and instability; yet investors continue to see the aftermarket as a precious gem — an attractive, long-term and valuable undertaking. Read more.
Despite all the volatility that seems to surround the industry these days, our sector is in pretty good shape. Many shops, parts retailers and distributors have seen a recent burst in activity, which could be the result of more drivers finally addressing furloughed maintenance, among other factors. Read more.
AUDIO: Solid financial footing
The automotive aftermarket may have hit a rough patch, but not many industries have historically performed as well as this segment, says Dan Smith, president of Capstone Financial Group. Listen
AUDIO: Driven by repairs
From an investment standpoint, the auto aftermarket is stable because there will always be a need for repair and upkeep of vehicles, says Kristin Newhall, partner for The Riverside Company, who adds that there has been a shift from accessories to more necessary items. Listen.
AUDIO: Painted with an OE brush
Sometimes, investment decisions in the aftermarket are affected by what goes on in the original equipment industry, says Jeremy Thompson, managing director for Oncap, who adds the aftermarket is sometimes lumped in with negative lending reports from the OE side of the business and therefore painted with the same broad brush. Listen.
AUDIO: Housing market lessons
There are a number of paralells between the aftermarket and other industries such as the housing market when making investment decisions, says Jeremy Thompson, managing director for Oncap. For one, the state of the financing market affects the money borrowed and the purchase price. Listen.
Investor Profile: Jeremy Thompson
Some investors like heavy involvement with the management decisions of their companies. But Jeremy Thompson, managing director with ONCAP Management Partners, assumes what he calls a "board level" management style, in which a hands-off philosophy can lead to hands-on returns. Read more.
Investor Profile: Jason Schmidly
Carousel Capital can attest to a simple but valuable business lesson for investing: eliminating guesswork by starting with a growing market is the first step to success. Read more.
