Aftermarket Manufacturers And Retailers Help Boost Automotive Parts Industry Performance In 2001

Autoparts Report, Oct 19, 2001

The stock performance of a selected group of automotive parts manufacturers and retailers is not as dismal as one might expect given the general economic conditions in the United States in 2001. Overall, the 54 companies in The Autoparts Report's analysis (see table on page 9) averaged a 26-percent increase in their stock prices in 2001 through Monday, October 15. These companies had a combined market capitalization of $132 billion.

Gains in both the aftermarket manufacturer and retail sector helped offset the rather weak OE sector. Stock prices of aftermarket manufacturers/distributors soared almost 156 percent led by a whopping 629 percent increase in the share price of Aftermarket Technology Corp., (ATAC), a remanufacturer and distributor of drivetrain and electronic products used in the repair of vehicles.

R&B, Inc., a supplier of "hard-to-find" parts, fasteners and service-line products primarily for the automotive aftermarket, saw its stock price jump 144 percent in 2001.

Keystone Automotive Industries, Inc.'s stock climbed by almost 87 percent year to date, reaching $13.07 at Monday's close. Keystone is a distributor of aftermarket collision replacement parts produced by independent manufacturers for automobiles and light trucks. The company also recycles and produces chrome plated and plastic bumpers and remanufactures alloy wheels.

Another solid performer in 2001, Genuine Parts Co., a service organization engaged in the distribution of automotive replacement parts, saw its stock price climb 33.5 percent.

Retailers

The automotive parts retailer posted sharp gains, with this sector averaging almost an 89 percent gain in stock prices. This sector, with a market capitalization of $6.96 billion, was dominated by one publically held company - Autozone Inc.- accounting for 88 percent of the sector's total capitalization. Autozone's share price jumped 99.1 percent in the period. The company is a specialty retailer of automotive parts and accessories, primarily focusing on do-it-yourself customers. Autozone operates more than 2,900 auto parts stores in 42 states and 13 in Mexico.

Discount Auto Parts was the best performer in this sector. With a market capitalization of $251.5 million, this company's share price soared 173.6 percent. CSK Auto Corp., the largest retailer of automotive parts and accessories in the Western United States, posted a gain of 94.2 percent in 2001.

OE Manufacturers

The Autoparts Report analysis also examined 32 original equipment manufactures with a combined market capitalization of $43.2 billion. Leading the way in this group, with a stock price increase of 92.1 percent was American Axle & Manufacturing Holdings Inc. American Axle is engaged in the manufacture, engineering, validation and design of driveline systems for trucks, sport utility vehicles and passenger cars, and is a Tier I supplier to the automotive industry. The company supplies driveline components to GM, DaimlerChrysler, Ford, Nissan, Renault, Visteon, Delphi and PACCAR.

The stock of Dura Automotive Systems, an independent designer and manufacturer of cockpit sub-systems for the global automotive industry, jumped 85 percent. The company's products include seating mechanisms, engineered assemblies, glass systems, door modules and mobile products. Dura sells its products to every major North American, Japanese and European automotive original equipment manufacturer.

Another strong performer in this sector was Collins Aikman, a supplier of automotive fabric, interior trim and convertible top systems. The company's stock price climbed 79 percent in 2001. Other OE companies posting solid returns include Gentex, Impco, ArvinMeritor, Magna International, Lear Corp., Navistar, Superior Industries, Visteon, Modine, and Delphi.

The biggest decliner in the OE sector, with a drop of 78 percent in its stock price, was Hayes Lemmerz Int'l., a producer of suspension module components to the global automotive and commercial highway. The company's products for

suspension modules include wheels, wheel-end attachments, aluminum structural components and automotive brake components.

Federal Mogul's stock was also hit hard during the period, declining 78 percent. Federal Mogul, which on October 1, 2001, voluntarily filed for financial restructuring under Chapter 11 of the United States Bankruptcy Code, manufactures engine bearings, pistons, piston pins, rings, camshafts, sintered products, sealing systems, fuel systems, wipers, lighting, ignition, brake, friction and chassis products.

Orbital Engine, a developer of engine technologies using direct injection, lean burn combustion and control systems, saw its stock price fall more than 65 percent in 2001. Other companies in this sector experiencing stock price declines include Rouge Industries, Amcast Industrial, Tenneco Automotive, Tower Automotive and Intermet Corp.

A number of diversified manufacturers that sell to the automotive industry include companies such as Johnson Controls, Timken, TRW Inc., DuPont, and SPX Corp. As a group these and other diversified companies serving automotive markets have a combined market capitalization of $75.1 billion. The average stock performance of the twelve companies in this sector declined by 5.7 percent year-to-date 2001.