Shares in a number of auto parts retails dropped on Monday after suggestions that Amazon was planning on expanding into the aftermarket automotive parts business.
In what could be Amazon’s latest move to disrupt traditional brick-and-mortar businesses, the online retailer has agreed to a number of supply contracts with prominent auto parts makers like Cardone Industries, Robert Bosch, Dorman Products and Federal-Mogul Holdings Corp FDML.O.
Consequently, shares in Autozone sunk by 5.1 per cent to $730.99 while shares in Advanced Auto Parts fell 4.2 per cent to $164.27. O’Reilly Automotive Inc and Genuine Parts Co also felt the effects of the Amazon report, falling by 4 per cent and 3.7 per cent respectively to $263.13 and $96 per share.
A report by The New York Post says that Amazon’s auto parts business could swell by over 50 per cent this year to $5 billion.
Aiding in Amazon’s expansion into the auto parts world is the company’s plan to introduce same-day delivery for auto parts in 40 major U.S. cities. Already, its parts are on average 23 per cent cheaper than those purchased from Advance, Auto Zone and O’Reilly.
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