Demand for industry services will soar as consumer confidence returns.
Los Angeles, CA (PRWEB) December 16, 2013
Over the five years to 2013, revenue for the Auto Parts Manufacturing industry has trended upward, however, industry operators experienced volatile swings in revenue during the economic downturn. “Because the industry relies heavily on automakers, fluctuating demand for cars and automobiles leads to an ebb and flow of demand for industry services; the greater the demand for automobiles, the more likely automakers will need to increase orders from upstream suppliers, such as auto parts manufacturers,” according to IBISWorld Industry Analyst Brandon Ruiz. Therefore, as consumer confidence fell over the five-year period, unemployment soared and consumers delayed big-ticket purchases, such as new cars. As a result, automakers reduced production levels, which hindered industry revenue growth. Nevertheless, as economic conditions improved, demand for new cars rebounded. IBISWorld expects industry revenue growth of an annualized 3.5% to $5.8 billion over the five-year period, including a 4.5% increase in 2013.
“Industry operators strongly depend on the United States as a trade partner, primarily due to the North American Free Trade Agreement (NAFTA), which allows domestic operators to trade freely with the United States and Mexico, thereby avoiding tariffs and lifting profit margins,” says Ruiz. The United States is expected to account for 89.7% of exports and 77.0% of imports in 2013.
Over the five years to 2018, domestic auto parts manufacturers are expected to thrive as demand for automobiles continues to increase, bolstered by improving economic conditions. As consumer confidence improves, new car sales are expected to rise in line with an influx of big-ticket purchases that were delayed during the recession. Regulation is also expected to play a prominent role over the next five years as industry operators search for alternative ways to manufacture more fuel-efficient auto parts in the face of rising regulatory standards.
For more information, visit IBISWorld’s Auto Parts Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture and rebuild a wide variety of motor vehicle parts and accessories. These parts include air bags, air-conditioners, catalytic converters, engine exhaust systems, mufflers and resonators, radiators, radiator cores and wheels.
Industry Performance
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Market Share Concentration
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Annual Change
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