Los Angeles, CA (PRWEB) March 22, 2012
The Auto Parts Stores industry has been turbocharged during the past five years. Revenue is expected to grow at an average annual rate of 1.1% to $40.4 billion in the five years to 2012, although dropping 3.5% in 2012. The industry is a resilient spot in the automotive sector, which had two horrific years in 2008 and 2009, says IBISWorld industry analyst Radia Amari. “While this needs-based industry has a dedicated do-it-yourself (DIY) customer base, the number of consumers who would rather go to an auto mechanic to have their vehicles fixed fluctuates with economic cycles,” Amari said. For example, a drop in disposable income during the recession pushed more consumers to fix vehicle problems themselves, resulting in a slight growth in this industry. Weak labor and credit markets depressed new vehicle sales, and the increasing average length of vehicle ownership compounded this trend in 2009, which continued in 2010. As consumers put off buying new cars and average vehicle ages rose, the need for repairs grew.
The largest national auto parts chains have aggressively expanded, often through acquisitions of smaller competitors. Industry leaders are introducing successful business practices and strategies from existing stores to improve productivity and profitability at acquired stores. As a result, major players have performed better than the industry overall during the five years to 2012. While major players have focused on retail expansion, they are also investing in providing auto parts to commercial customers. Auto Zone Inc., Advance Auto Parts Inc., Genuine Parts Company and O’Reilly Automotive Inc. are the top four major players in the Auto Parts Stores industry; combined, they control more than half the market. Most other auto parts stores are independently owned and operated establishments. For large and small enterprises alike, commercial sales have been a critical growth segment. Industry players are leveraging their distribution centers to sell auto parts to the government, national and regional repair garages and service stations. This factor will provide a steady revenue stream for the industry because the market for wholesale auto parts has room for growth.
This low-volatility industry will grow slowly and steadily through 2017. The commercial business segment will still provide demand resilience. National and regional repair garages have sought to lower prices on repairs to attract customers. Buying auto parts from large retailers essentially lowers garages' typical repair costs. At the same time, as the economy gains steam, consumers will invest in new vehicles and visit auto mechanics at increasing rates. These trends will limit revenue growth over the next five years. For more information, visit IBISWorld’s Auto Parts Stores report in the US industry page.
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IBISWorld industry Report Key Topics
Companies in the Auto Parts Stores industry sell automotive parts and accessories, with the exception of tires.
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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