Car retailers are beating automakers and suppliers in the Automotive News Europe/PricewaterhouseCoopers Total Shareholder Return Index.
In the first quarter, investors bet that sweeping revisions of rules governing sales and repairs in the European Union will most benefit large dealer companies.
The index measures growth in the value of investments.
'Large dealership groups are expected to benefit from the proposed block exemption review due to their increased buying power and critical mass,' said Philip Wylie, head of the automotive team at Pricewaterhouse-Coopers Corporate Finance. The gains will come at the expense of smaller dealer groups, he said.
Also helping retailers was a surge in car sales in the UK, where many of them are based.
Another factor affecting share prices in the first quarter was several acquisitions among both retailers and suppliers. Potential for consolidation within an industry typically boosts shares.
'Acquisitions are being carried out by strategic buyers who are finding good value at present with valuations lower than in the past two to three years,' Wylie said. 'The majority are smaller deals, which tend to be more strategic acquisitions with long-term potential rather then the mega deals of the past.'