Rising globalization and demand from major automakers will lead to a modest recovery.
Los Angeles, CA (PRWEB) September 06, 2013
Historically, automakers have been the main drivers of demand for the Automobile Interior Manufacturing industry, a relationship that became this industry's downfall during the recession. As demand for automobiles fell and the Car and Automobile Manufacturing industry (IBISWorld report 33611a) was in disarray, demand for interior parts crashed. However, the industry was able to make a quick turnaround as the economy began recovering in 2010 and 2011, improving efficiency among major automakers facilitating growth in vehicle production. Over the five years to 2013, revenue is expected to increase at an annualized rate of 1.3% to $19.7 billion, capped off by a 3.7% anticipated growth in 2013, showing a successful return to growth from the recession.
Consumer demand trends have had a marked effect on the industry in recent years. High gasoline prices and environmental concerns led consumers to increasingly demand fuel-efficient vehicles; but domestic automakers stalled on production. “Instead of responding to the shift in demand by manufacturing fuel-efficient cars, US automakers continued producing gas-guzzlers,” reported IBISWorld industry analyst Brandon Ruiz. When the recession hit, all car sales plummeted, causing US manufacturers to seek emergency help from the government. As motor vehicle production fell, demand for interior parts declined as well.
Industry profit fluctuated drastically over the past five years. Even as demand and revenue from downstream manufacturers fell, firms initially failed to combat rising costs, yielding lower profit margins. Still, the increased costs of expansion and downward price pressures from downstream automobile manufacturers will likely calm profit margins down to historical norms by 2018.
Over the five years to 2018, the automotive sector is expected to globalize further, with imports and exports increasing. “Domestic automobile interior manufacturers will benefit from a rise in worldwide demand,” said Ruiz. Growth in worldwide manufacturing activity and ongoing weakness in the US dollar will fuel sales to foreign markets, boosting revenue.
For more information, visit IBISWorld’s Automobile Interior Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in Automobile Interior Manufacturing industry manufacture motor vehicle seats and a variety of interior components, including motor vehicle upholstery, seat covers and seat belts.
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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