Los Angeles, California (PRWEB) August 14, 2013
Over the five years to 2013, the Battery Manufacturing industry experienced steep declines in revenue due to recessionary drops in demand. However, as the economy recovers, this industry is expected to rebound in the coming years. “The industry's revenue is volatile because it is heavily influenced by the automotive market as well as the level of trade,” according to IBISWorld industry analyst Caitlin Newsom. Industry operators have also had to contend with rising input prices, as the cost of key materials has fluctuated over the past five years. The cost of lead and nickel, materials used in battery manufacturing, have risen over the past five years and are expected to continue rising over the five years to 2018. The higher prices of these inputs are cutting into industry profit, driving down the average margin.
Battery Manufacturing industry revenue is expected to fall at an average annual rate of 4.5% to $165.0 million over the five years to 2013, including a 0.5% decline over 2013. “The recession in Canada and the United States caused downstream demand from the Car and Automobile Manufacturing industry to plummet in 2009,” says Newsom. Because the United States is the main importer of Canadian cars, accounting for about 98.0% of car exports, declines in demand have devastating effects on car manufacturers. Automotive batteries account for an estimated 43.1% of industry revenue; therefore, decreases in demand from car manufacturers drive down industry revenue.
Market share concentration in this industry is high. The number of enterprises has been falling at an annualized rate of 5.1% over the past five years due to declines in industry revenue, causing operators to exit the market. Due in part to the declining number of companies, market share concentration has increased over the five years to 2013. Major players include Exide Technologies and EnerSys Canada Ltd.
Over the five years to 2018, industry revenue is forecast to skyrocket due to recovering downstream demand. As domestic and foreign economies continue to rebound, downstream demand is expected to pick back up. Demand from car manufacturing and consumer spending are both expected to grow over the next five years. As consumers increase spending and buy more electronics and other products that require batteries, industry revenue will increase. Additionally, the level of exports is projected to grow over the next five years as industry operators develop more advanced batteries. Research and development investments are also expected to increase as industry revenue rebounds, allowing operators to develop more efficient and reliable batteries. As domestic batteries become more advanced, foreign markets increase their demand for industry products.
For more information, visit IBISWorld’s Battery Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures two types of batteries: primary and secondary batteries. Secondary batteries are also known as rechargeable or storage batteries. Primary batteries have only one life and are not rechargeable. Industry products have a variety of uses, including in cell phones, medical equipment, households and the automotive and transport sectors.
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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