The Auto Industry has a new big customer

*This is not financial advice. All content should be considered opinionated. We are not responsible for any of your gains and losses. I am neither a licensed or registered financial expert. Please see a financial advisor before making investment decisions. 

Photo by Hasan Almasi on Unsplash

With the destruction of many police vehicles all around the US due to the riots going on, it's sad to see many police cars abandoned, damaged, and even set on fire. All over social media, people are seen damaging windows on them, jumping on them, taking items like guns and bulletproof vests from them, and even steal them. 

Amidst all the chaos that's going on, I see a big opportunity for the auto industry.

The Catalyst

As these protests end, I see many local governments ordering a lot of new vehicles for their police force. 

We're talking about a large fleet of them.

Photo by Gianandrea Villa on Unsplash

Once the protests are over, many municipalities will still want to provide their police force with the necessary transportation for them to do their jobs. That's why they're going to be serious about replenishing their fleet with newer vehicles. 

With tons of police vehicles damaged and stolen, big automakers and others in the auto industry will stand to benefit from the huge wave of demand from these municipalities. 

Not only will the automakers benefit but also the suppliers. 

For some municipalities, parts will be in higher demand than the whole car as some local governments look to save money and have the car repairs rather than replaced entirely. 

Overall

With the many police cars damaged, the riots of 2020 will bring a wave of spending for the auto industry. This government spending could be what can start the revival of the auto industry and the revival of the American and world economy. 

Photo by Arthur White on Unsplash

Plus, many other civilians that had their vehicles damaged or stolen from the riots and looters will most likely spend money on getting themselves a new car. Because the economy isn't doing well currently, many people will search for a car in the used car market. The increase in demand for used vehicles will help boost the prices for used vehicles. 

While these times are volatile, at least we know that there's a light at the end of the tunnel. We need to continue staying strong and push forward. 

On a side note, because it seems like most of the police vehicles I see are Ford's, I think this riot signals the start of the turnaround for the Ford Motor Co. (NYSE: F). And, because the Dodge Charger is the second most common police vehicle I see, Fiat Chrystler Co. (NYSE: FCAU) would also get to benefit from this catalyst.