Negative sentiment stemming from short-term challenges, management changes, and structural shifts in the automotive industry has led to an underappreciation of the fundamental strength and resilience of Bapcor’s automotive-parts business. A slowdown in discretionary spending is impacting retail in the near term; the new management team will need to demonstrate its capabilities; and the rise of electric vehicles presents a long-term challenge for the trade business. Nevertheless, we believe that the current pessimism overlooks the inherent resilience of the automotive spare parts industry, and Bapcor is well-positioned to navigate the gradual technological transition effectively.
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