Alongside sectors that experienced significant earnings tailwinds in 2020, such as technology and healthcare, the automotive sector proved resilient, delivering strong returns.
Here are the ASX shares in the automotive sector that pushed higher in a year impacted by the coronavirus pandemic.
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Eagers Automotive Ltd (ASX: APE)
The Eagers Automotive share price was a top performing ASX share in 2020, closing 30% higher.
The company provided the market with an upbeat guidance upgrade, expecting to deliver an underlying operating profit before tax in the range of $195 to $205 million for 2020, compared to $100.4 million for the prior corresponding period.
The guidance reflects the first full year of trading for the enlarged company following its transformative merger with Automotive Holdings Group.
The update highlights rebounding vehicle sales from the historic lows experienced during April and May 2020. It said that sales have continued in a strong trajectory and supply constraints caused by global manufacturer factory closures during the June quarter have started to ease, demonstrated by the 12% uptick in national vehicle deliveries recorded during November.
Bapcor Ltd (ASX: BAP)
Similarly, the Bapcor share price finished the year 20% higher on a similar premise of strong revenue growth. In the company's trading update for the first quarter of FY21, it indicated that Group revenue was up 27%.
Looking ahead, the company anticipates that it will achieve revenue growth of at least 25% over the pcp in FY20, and net profit after tax will increase at least 50% over the pcp which was $45.6 million.
Carsales.com Ltd (ASX: CAR)
The Carsales share price also finished the year 20% higher following strong growth in car ownership demand and traffic to its platform. The company has revealed a number of trends emerging from COVID-19 that support continued earnings growth.
Firstly, key observations from a recent Carsales survey has seen an increased preference towards online shopping, away from traditional retail. Another recent Carsales survey indicated concerns about taking public transport or using rideshare due to hygiene concerns.
The company also pointed towards government stimulus initiatives that have driven increased demand for vehicles. This includes instant asset tax write offs for assets up to $150,000, which has stimulated demand for cars in the commercial sector.
Individuals affected by COVID-19 have also been granted early access to two $10,000 parcels of their superannuation in FY20 and FY21.
Foolish takeaway
The automotive sector has benefitted from a number of trends emerging from COVID. With strong forecasted earnings and proven outperformance in 2020, investors will be watching to see if the sector can continue its performance in 2021.
