Firms that capitalize on customers' desire for fuel-efficiency will perform well
Los Angeles, CA (PRWEB) March 16, 2012
The Garbage-Collection Vehicle Manufacturing industry declined over the past five years. Industry revenue is expected to decrease at an average annual rate of 1.4% to $998.3 million in the five years to 2012. The recession caused businesses and consumers to produce less waste, prompting many waste collection firms to hold off purchasing and leasing new vehicles. According to IBISWorld industry analyst Justin Molavi, “These firms also faced difficult financing conditions as credit markets tightened up, making it difficult to borrow money to finance capital purchases.” Municipalities also purchased fewer trucks, as high unemployment and a drop in consumer spending resulted in fewer tax dollars available for garbage truck purchases. Additionally, as consumers started pulling back spending, waste volumes trended downward, reducing the need for more refuse vehicles.
There have been some glimmers of hope for the industry, however. Waste collection firms in a better position to purchase new vehicles opted hybrids or vehicles that use alternative fuels, such as compressed natural gas. These firms faced rising fuel costs over the past five years and sought ways to bolster their own profit margins by purchasing vehicles that could save on operational costs (i.e. fuel). “Furthermore,” says Molavi, “the expiration of a bonus deprecation tax at the end of 2011 will serve to help sales activity as many customers ramp up purchasing activity to take advantage of the tax haven.” In turn, industry revenue is expected to expand in 2012. The Garbage-Collection Vehicle Manufacturing industry is heavily concentrated, with the top four players – AB Volvo, Oshkosh Corporation, Dover Corporation and AutoCar LLC – controlling almost the entire market.
The next five years are set to be brighter for the industry. As the US economy gains steam, commercial entities like restaurants and hotels will create more waste, responding to higher demand from consumers. Waste collection firms will respond to this increase by purchasing more vehicles to meet the demand. Also, as unemployment wanes, municipalities will experience heightened tax revenue, providing the basis for higher refuse vehicle purchases. Customers will continue to seek garbage trucks that can save fuel costs, as these costs are expected to continue to rise over the next five years. As a result of these trends, industry revenue is anticipated to expand in the five years to 2017. For more information, visit IBISWorld’s Garbage-Collection Vehicle Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
This industry manufactures garbage collection vehicles. These vehicles are used by waste collection and treatment companies to pick up and gather waste from residential and commercial sites. This industry does not include vehicles that collect hazardous waste.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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