As consumers drove less and postponed car repairs, industry demand faltered.
Los Angeles, CA (PRWEB) November 09, 2013
The Car Body Shops industry hit a bumpy road over the past five years. “The recession has had lingering effects on the industry, with consumers holding off on essential repairs and pulling back on discretionary services like paint jobs,” according to IBISWorld Industry Analyst Kerry Coughlin. As a result of these adverse conditions, industry revenue is expected to drop at an average annual rate of 1.7% to $36.6 billion in the five years to 2013 dropping 0.4% in 2013. Neglected repairs offered a bright spot for the industry during the immediate years following the end of the recession, but revenue will begin leveling out again in 2014 with a 1.2% increase. However, the increasing demand for new cars will limit revenue growth moving forward.
The industry has been experiencing trends that suggest it is in the very mature stage of its life cycle. Newer cars rolling off the assembly lines of car manufacturers are stronger, safer and help drivers avoid collisions. Stricter regulations in the Car and Automobile Manufacturing industry (IBISWorld report 33611a) have pushed car manufacturers to include heavy safety provisions for the driver; these advanced technologies in new vehicles resulted in fewer collisions over the past five years.
Over the next five years, the industry is anticipated to continue traveling along the same bumpy road. As the US economy gains stronger footing, consumers will experience increases in disposable income and purchase new cars at higher rates. These new cars will come equipped with more technologies that increase safety and help drivers avoid accidents and mishaps. “Fewer collisions will translate to reduced industry demand for repair services,” says Coughlin. Despite the pent-up demand for repairs created during the recession, expected increases in new car sales will more than offset the demand increase from consumers who held off visiting industry companies for service. New car sales will limit growth prospects for the industry.
For more information, visit IBISWorld’s Car Body Shops in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Car Body Shops industry provides repair and customization work to the interior and body of passenger cars, trucks, vans and trailers. Some industry operators specialize in certain auto repairs; for example, paint shops specialize in post-collision paint jobs, while automotive glass shops replace, repair and tint windows. Restoration shops, which typically represent a niche market, restore classic and antique cars.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.