Melbourne, Australia (PRWEB) November 01, 2013
The Semi-Trailer and Truck Rental industry in Australia has cruised through a growth period over the past five years with some minor bumps along the road. The industry is expected to grow by 2.3% over the five years through 2013-14 to reach $87.1 million. This growth is understated, as it comes off a high base year in 2008-09. Over 2008-09, the industry benefited from an increase in merchandise imports and exports. The Road Freight industry, a key source of industry demand, declined over the year. According to IBISWorld industry analyst Kosta Lev, “although declines in road freight are usually bad for revenue, when combined with a simultaneous growth in merchandise trade it was in fact beneficial for the industry.” Road freight companies delay purchases of new vehicles for their fleet during tough economic conditions, instead favouring rentals to boost their short-term fleet for temporary increases in capacity demand. Revenue fell in the following year, as merchandise trade dropped and road freight required less capacity. Growth has steadied since, with global economic conditions improving and demand from road freight stabilising. IBISWorld expects revenue to grow by 2.4% in 2013-14.
Industry profitability has declined over the past five years and is expected to continue to do so over the five years through 2018-19. This has mainly been due to increasing wage costs as companies hire more on-site staff for maintenance of their vehicle fleets. “Over the next five years, increasing competition will continue to put downward pressure on profitability as companies narrow margins to promote demand,” says Lev. Even so, profitability remains considerably high for the industry as it supplies high-value, niche products. The Semi-Trailer and Truck Rental industry displays a low level of market concentration, with Rentco Pty Ltd as the only major player.
Demand from road freight companies will continue to be the main driving force of revenue. Merchandise exports are expected to benefit from a falling Australian dollar and imports may be inversely affected. Concerns over the next five years will include competition from new truck sales, as well as rail freight transport, which reduces the need for more trucks on the road. A stabilising global economy is expected to drive activity in consumer markets and lead to an overall positive outlook.
For more information, visit IBISWorld’s Semi-Trailer and Truck Rental report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry primarily rent out semi-tractors (trucks) and semi-trailers without a driver, including prime movers, tandem-axle and tri-axle trailers. The industry excludes companies primarily engaged in long-term leasing activities.
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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