The current economic climate is more favourable for car parts dealers rather than car manufacturers
Melbourne, Australia (PRWEB) June 01, 2012
Demand for the Motor Vehicle New Part Dealing industry is being both positively and negatively influenced by current difficult economic conditions. Revenue growth is being greatly hampered by a downturn in the car manufacturing industry, which is reducing demand for new car parts from major players. However, more consumers are keeping their existing vehicles instead of trading them in for newer models, which is creating demand for car parts, as increased maintenance requirements are being pursued. According to IBISWorld industry analyst Aries Nuguid, “As the retailing consumer holds a greater proportion of market share than the manufacturing segment, these factors are creating a more favourable environment for car parts dealers compared with car manufacturers”. Over the five years through 2011-12, industry revenue will decline at a slow rate of 0.4% annually to $11.6 billion.
Due to the current economic slowdown, the industry has observed substantial change in its core market segments. Motor vehicle manufacturers, for example became less important in 2008-09 due to reduced demand for new cars, which restricts sales to this market. Nuguid adds, “As consumers look to prolong the life of their current vehicles, the retailing market segment will become increasingly important”. In 2011-12, revenue is expected to fall 2.1%, mainly due to sluggish demand from the aftermarket and lower prices. Over the next five years, industry revenue is expected to decline because of slow demand from domestic car manufacturers and the lengthening of the replacement cycle.
The top four players in the Motor Vehicle New Part Dealing industry are Exego Group, Robert Bosch, Toyota Motor Corporation, and GM Holden. The industry is estimated to have a low level of market share concentration because aside from the few major players, the industry is highly fragmented with several independent stores supplying the market. A shakeout in the industry is highly likely as independent operators are acquired by the larger players. However, the level of concentration in the industry is estimated to be increasing, as firms are becoming larger. Several stores are looking to branch out and create a strong market presence, and this has seen enterprises as a percentage of establishments decline over the past decade.
For more information, visit IBISWorld’s Motor Vehicle New Part Dealing report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry wholesale new motor vehicle and motorcycle parts and accessories. These include parts such as batteries, accessories such as car radios, as well as motor vehicle and motorcycle tyres. Parts and accessories are mainly sold to motor vehicle manufacturers, parts retailers and mechanics.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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