Expected growth in oil prices will keep demand high as more consumers switch to hybrid and electric vehicles
Los Angeles, California (PRWEB) October 20, 2011
The Hybrid and Electric Vehicle Manufacturing industry will pick up speed over the next five years. Revenue is anticipated to increase 6.3% per year to $4.2 billion in the five years to 2016, according to IBISWorld, the nation’s largest publisher of industry research. Expected growth in oil prices will keep demand high as more consumers switch to hybrid and electric vehicles. Firms will continue to introduce new vehicle models to capture consumer interest. For this reason, IBISWorld has expanded its industry research report collection to include Hybrid and Electric Vehicles and other industries within the clean and green technologies sector.
According to IBISWorld senior analyst Justin Molavi, the Hybrid and Electric Vehicle Manufacturing industry has expanded over the five years to 2011. “Revenue is anticipated to grow 2.5% per year to $3.1 billion in the five years to 2011,” says Molavi. “High oil prices before and after the recession prompted consumers to purchase hybrid and electric vehicles at accelerating rates to stave off rising fuel expenses.” Consumer tax credits for hybrid and electric vehicles also led to industry demand growth as more consumers could afford the industry's product (by letting consumers write off certain taxes associated with the purchase of a hybrid or electric vehicle). Rising environmental awareness among consumers also increased sales, since industry purchases are perceived as being positive for the environment.
The recession caused industry revenue to decline as consumers pulled back on expenses amid drops in disposable income. When the economy entered a recession, oil prices dropped as demand for gasoline declined. As a result, consumers held off on purchasing hybrids and electric vehicles because the switch from other types of vehicles to the industry's product (hybrid and electric vehicles) was not as necessary since savings on fuel costs were now negligible. Low oil prices during the recession resulted in very little fuel savings possible with a purchase of a hybrid or an electric vehicle. However, oil prices have risen significantly during the economic recovery, reversing this trend. “Consumers are increasingly purchasing these vehicles to cut down on fuel expenses, causing industry revenue to jump 4.6% from 2010 to 2011 on the back of this trend,” says Molavi.
The next five years are set to be brighter for the Hybrid and Electric Vehicle Manufacturing industry. Oil prices are expected to stay relatively high as the global economy gains steam and emerging economies demand oil at increasing rates. In turn, more consumers will buy hybrids and electric cars to save on fuel costs over the five years to 2016. Moreover, industry players like Toyota Motor Corporation, Ford and Honda Motor Co Ltd., will continue introducing new models to capture increases in demand. Environmental awareness will remain a concern for consumers as well, pushing many consumers to purchase hybrids and electric vehicles for their perceived environmental sustainability qualities. As a result of these trends, industry revenue is expected to grow 6.3% per year to $4.2 billion in the five years to 2016.
For more information, download the full report from IBISWorld on the Hybrid and Electric Vehicle manufacturing industry
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