Operators were partially insulated against the recession because their parts are essential.
London, United Kingdom (PRWEB) August 16, 2013
In a recession, motor vehicle parts sellers tend to fare better than other companies in the automotive sector because motorists have to buy essential parts. However, the Motor Vehicle Parts Sellers industry has still encountered some problems over the past five years. Revenue dropped substantially in 2009-10 due to consumers putting off large purchases. Since then, it has grown erratically, recording a significant improvement in 2011-12 but much lower figures in other years. Over the five years through 2013-14, industry revenue is expected to decline at a compound annual rate of 1.1% and reach £5.9 billion. Difficult conditions have been exacerbated by rising fuel costs, which have reduced motor vehicle use and thus brought down the need for replacement parts. According to IBISWorld industry analyst Lewis Sutton, “The subdued recovery of the UK economy is expected to limit revenue growth to 1.0% in 2013-14.”
The Motor Vehicle Parts Sellers industry exhibits a low level of market share concentration. The industry is extremely fragmented and there are a large number of operators. “Aside from one major company, there are very few motor vehicle parts sellers that operate on a large scale,” adds Sutton. Well over half of industry establishments employ fewer than five employees and 79.0% of establishments have fewer than 10 members of staff. This illustrates the competitive and fragmented nature of the industry. It is gradually becoming more concentrated, but this change is happening slowly.
As a result of the fall in demand, many of the less efficient operators have left the industry or have been absorbed by more successful players. The number of industry enterprises has fallen at a compound annual rate of 2.9% over the five years through 2013-14. The exit of these inefficient businesses caused operating profit margins to rise from an estimated 13.0% in 2008-09 to 14.2% in 2013-14. High profit margins are expected to encourage market entrants, which is likely to force margins down once more over the next five years. The industry is forecast to fare better over the next five years and revenue is projected to grow steadily. However, the restrained economic recovery is anticipated to limit revenue growth. Improved consumer confidence and the rising age of the cars on British roads are expected to aid industry performance. Emerging markets, such as hybrid and alternatively fuelled vehicles, will also support revenue. For more information on the Motor Vehicle Parts Sellers industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry sell motor vehicle parts such as batteries, spark plugs, tyres and electrical components directly to the public. Wholesale activities, such as bulk sales to car mechanics who use the parts when carrying out repairs, are not included in this industry.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
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