As the resurgence of COVID-19 cases is making people repair and maintain their existing cars or buy used cars, amid the rising prices of new vehicles, the aftermarket auto parts industry is well-positioned to see strong sales growth. That means companies like Magna (MGA) and Aptiv (NYSE:APTV) are expected to benefit from the industry tailwinds. But which of these stocks is a better buy now? Read more to find out. Magna International Inc. (NYSE:MGA) designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. The company operates through four segments: Body Exteriors & Structures; Power & Vision; Seating Systems; and Complete Vehicles. On the other hand, Aptiv PLC designs (APTV), manufacturers, and sells vehicle components worldwide. In addition, it provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. It operates through two segments: Signal and Power Solutions; and Advanced Safety and User Experience.
As governments worldwide are reinstating lockdown and social distancing measures to limit the spread of the highly transmissible Delta variant of the coronavirus, people have again started avoiding public transportation. Since the semiconductor chip shortage leads to rising prices for new cars, people are getting their old cars fixed or buying used cars. This is leading to increasing demand for aftermarket auto parts and accessories. According to a Precedence Research report, the global automotive aftermarket is expected to expand at a CAGR of 4.61% from 2021 to 2027.
MGA has gained 10.4% over the past six months, while APTV returned 8.5%. However, APTV’s 22.5% gain year-to-date are higher than MGA’s 19.2% return. Moreover, APTV is the clear winner with a 90.4% gain versus MGA’s 73.1% in terms of the past year’s performance.