Automakers had to cut production in 2021 due to supply chain issues and semiconductor shortages. However, new car production is expected to rebound with improving supply conditions. According to IHS Markit, U.S. new-car sales in 2022 are expected to rise to 15.47 million vehicles from an estimated 15.07 million in 2021. With improving production, auto parts manufacturing companies should benefit.
Moreover, innovations in the automotive industry are bolstering the growth of the auto parts industry. With companies planning to manufacture lightweight and more fuel-efficient vehicles and use the latest technology-led motors and engine radiators, the demand for compatible auto parts is rising. In addition, the new vehicle shortage and the elevated prices drove the demand for used vehicles higher, which increased the need for auto parts for repairs. The auto parts market is expected to reach $299.98 billion by 2025, registering a 3% CAGR.
