Toronto, Ontario -- North America's aftermarket businesses were thrown into disarray over the weekend due to a developing standoff between Canada and the United States.
Last week, U.S. President Donald Trump announced he was cancelling trade negotiations with Canada because the nation was implementing a digital services tax, which would affect major U.S. technology companies operating in the True North. On Monday, Canada's government announced it would cancel the new tax and the Trump administration announced it would return to the negotiating table.
The announcement of resumed negotiations boosted confidence across the automotive sector. A quick look at the stock price performance of Canadian and U.S. companies reveals that confidence was felt more strongly north of the border.
Northern Rebound
The Winnipeg-based Boyd Group, a leading operator of non-franchised collision repair centres in North America, was severely rocked by Trump's cancellation of trade talks on June 27. It saw its stock price fall to $346, down five percent from its value on June 23. News that Canada had been able to convince the U.S. to return to the table allowed Boyd's stock to hit $360 by noon, up four percent from Friday.
Boucherville-based Uni-Select, a key distributor of automotive refinish and industrial coatings products, also felt the sting of market uncertainty. Its shares dipped to about $68 on June 27, down three percent from earlier in the week. The recovery was swift, with stock climbing to roughly $71 as confidence returned following the end of the tax dispute.
Guelph-based Linamar, a major manufacturer of powertrain systems and vehicle components, experienced an even steeper drop. Its stock closed near $100 after Trump’s remarks, a six percent slide. By the next trading session, Linamar rebounded to $103, gaining back about three percent as fears of tariffs eased.
Southern Slips
Tennessee-based AutoZone, one of the largest U.S. retailers of automotive replacement parts, proved more resilient. Its stock slipped slightly to U.S.$3,609.49 on June 27, but quickly bounced back. By Monday afternoon, shares were trading near U.S.$3,678.18, a rise of nearly two percent.
North Carolina’s Advance Auto Parts, a supplier of automotive aftermarket parts and accessories, saw more modest movement. It dropped to US$45.30 during the turmoil, down nearly 1.5 percent. With the trade talks revived, shares edged up to US$45.76 in the next session, a small but notable recovery.
The Springfield, Missouri-based O’Reilly Automotive, one of the largest aftermarket parts retailers in the United States, was hit harder than its main competitors. Its stock closed at US$89.16 on June 27, down nearly two percent from the start of the week. The resumption of trade talks offered a mild lift, with shares climbing to US$89.54 by Monday afternoon.
Detroit-based Ford Motor Company, a major vehicle manufacturer with deep ties to the Canadian supply chain, also took a knock during the standoff. Its shares dropped to US$10.80 by the end of June 27, down two percent from Monday’s level. Ford’s stock edged down slightly further after the tax was withdrawn, closing at US$10.76.
Genuine Parts Company, headquartered in Atlanta and the owner of NAPA Auto Parts, felt sharper pressure than many of its retail rivals. The company’s stock had already been underperforming and slid further to end June 27 down nearly three percent at US$134. Shares regained a little ground Monday, rising to about US$137.
Florida-based AutoNation, one of America’s largest auto retailers, fared no better. Its stock dropped to US$180 on June 27, down almost four percent from early-week highs. Though the company saw no immediate bounce after Canada dropped the tax, shares stabilized around US$183 by the next session.
