Mounting costs pressure operating profit margins, which in turn leads most US baby stroller and car seat manufacturers moving production offshore.
Los Angeles, CA (PRWEB) January 13, 2012
The Baby Stroller and Car Seat Manufacturing industry struggled during the recession, but the tides have started to turn. During the five years to 2012, revenue is expected to decline at an annual average of 0.8% to $332.2 million; most of the fall off occurred in 2008 and continued through 2009. According to IBISWorld industry analyst Sophia Snyder “during the economic recession, consumers put off or reduced spending due to falling disposable income. This includes necessary items, such as car seats, which are mandated by law. Although consumers with babies did not eliminate spending on car seats and other baby mobility products, they elected to purchase lower-priced merchandise or second-hand goods.”
The economic environment has been improving in more recent years, elevating disposable income and the birth rate. These trends have contributed to expected revenue growth of 4.0% in 2012. Sales have also benefited from evolving regulation and laws that encourage consumers to buy new products with more advanced features to comply with standards. Tighter regulations have also increased manufacturing costs, as operators shift to improved materials or are forced to change vendors in order to procure certain parts. Mounting costs are expected to pressure operating profit margin. Moreover, escalating import competition, although still small, will add to profit margin pressure. Cheaper products from foreign manufacturers have forced domestic manufacturers to reduce prices. This trend is expected to persist through 2017 as imports inch up to as a proportion of domestic demand – already imports satisfy the vast majority of US consumer demand. Industry operators are expected to continue shifting production overseas in response, causing the number of establishments to decline 1.8% per year.
Snyder says that “the Baby Stroller and Car Seat Manufacturing industry exhibits a low level of market share concentration. The low level of concentration stems from the fact that most US car seat and stroller manufacturers offshore production to countries with lower costs, such as China or Indonesia.” As a result, few firms remain to manufacture goods in the United States. As such, the only industry major player is Evenflo Company. Concentration is anticipated to remain low as long as companies find overseas production to be more cost effective than US manufacturing.
For more information visit IBISWorld’s Baby Stroller and Car Seat Manufacturing industry report.
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This industry manufactures transportation equipment for infants and toddlers, such as strollers, carriers and car seats. Manufacturers buy raw materials, design samples and manufacture and market finished products to wholesalers and retailers.
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Products & Services
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