Los Angeles, CA (PRWEB) June 02, 2012
The Auto Parts Wholesaling industry has been on a bumpy road over the five years to 2012. The industry suffered through the recession as the entire automotive sector spiraled downward. Key partnerships with original equipment manufacturers (OEMs) were lost, sales at auto parts retailers choked and consumers deferred auto repair services and parts replacements, say IBISWorld industry analyst Antonio Danova. As a result, industry revenue is expected to decline at an annualized rate of 4.7% to total $131.7 billion. However, the automotive sector stabilized as the economy improved in 2010 and 2011, fueling revenue growth across the industry. Moreover, revenue is expected to increase 1.9% in 2012 as auto manufacturers, auto service providers and auto parts retailers increase demand for wholesaled parts.
The four largest major players in the Auto Parts Wholesaling industry are Magna International, DENSO Corporation, Robert Bosch GmbH and the Delphi Corporation. The low concentration level indicates that the industry is highly fragmented and that there is significant scope for consolidation by some of the industry's major players. Additionally, the low concentration of firms indicates that the industry is highly competitive. IBISWorld estimates that market share concentration has declined over the five years to 2012. Some players have had revenue severely pruned by the crisis facing US automakers. Some niche operators and foreign operators looking to penetrate the US market were less affected during the crisis. Though these companies remain relatively small, some have managed to steal market share from the industry's largest players. In fact, as American wholesalers faltered during the recession, foreign-owned companies, like Magna International and DENSO Corporation, were able to boost their domestic presence, continues Danova. Major US-based wholesalers Delphi and Visteon incurred massive losses as their affiliated manufacturers, General Motors (GM) and Ford, decreased production due to fear of further losses. On the other hand, DENSO benefitted from the mostly steady US productivity of its affiliated manufacturer, Toyota. Additionally, other foreign manufacturers like Honda, Nissan and Volkswagen all experienced better sales as major American automakers faltered. Many of these automakers have established relationships with foreign wholesalers that undermine opportunities for growing US wholesalers. Still, increased foreign productivity is a positive movement for the Auto Parts Wholesaling industry that is expected to usher in further growth as it stabilizes.
Demand from automakers is expected to be the biggest driver for sustained industry growth, but higher sales of industry goods in the long run will rely on the move toward technologically advanced, fully equipped amenities, such as on-board diagnostic systems and innovative safety features. In turn, the sale of more technologically advanced, high-margin goods will revive industry profitability. Additionally, fuel economy standards will require auto manufacturers to outfit new vehicle platforms with fuel-efficient technology. Demand for these components will create new product focuses for wholesalers looking to expand sales accounts and increase revenue. As a result, industry operators are anticipated to achieve revenue growth over the five years to 2017. For more information, visit IBISWorld’s Auto Parts Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises firms that sell automotive parts wholesale to automobile manufacturers, automotive parts retailers and auto service providers. Sale of new tires and tubes is not included.
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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