Why the Auto Parts Sector Could Hold Up In a Recession

AutoZone store.

Right now, net lease auto parts properties, like other retailers, are struggling. COVID-19 has kept customers at home instead of buying the replacement parts and accessories. But the fact they’re not in their cars will also hold the sector back. “It’s not great in the short term as people will be driving and traveling less,” says Randy Blankstein, president of The Boulder Group.

But longer-term, things may look better for the sector. If the economy really falls into a deep recession, consumers will be less likely to buy new cars, which means they’ll need to keep their old cars on the road. “It might be good for them for the medium term as there is lower demand for new cars because people will drive existing automobiles for longer,” Blankstein says.