Higher demand from automobile manufacturers will benefit wholesalers
New York, NY (PRWEB) June 24, 2014
Due to the economic downturn, the Auto Parts Wholesaling industry has traveled a bumpy road over the five years to 2014. During the early part of the five-year period, key partnerships with original equipment manufacturers (OEMs) were lost, sales at auto parts retailers suffered and consumers postponed auto repair services and parts replacements. Nevertheless, these trends reversed in 2010. As a result, industry revenue is expected to increase at an annualized rate in the five years to 2014, fueled by improved demand from car and automobile manufacturers.
The Auto Parts Wholesaling industry carries a low level of market share concentration. As industry operators faltered during the recession, foreign-owned companies such as Magna International Inc. and Denso Corporation were able to boost their domestic presence. For example, according to IBISWorld Industry Analyst Brandon Ruiz, “major US-based wholesalers Delphi Automotive PLC and Visteon Corporation incurred massive losses as their affiliated manufacturers, General Motors (GM) and Ford, decreased production due to fear of further losses.” Additionally, other foreign manufacturers like Honda, Nissan and Volkswagen all experienced better sales as major American automakers faltered. Many of these automakers have established relationships with foreign wholesalers that undermine opportunities for growing US wholesalers. Still, “increased domestic production by foreign competitors is a positive movement for the industry to usher in further growth,” says Ruiz.
Demand from automakers is expected to be the biggest driver for sustained industry growth, but higher sales of industry goods in the long run will rely on the move toward technologically advanced, fully equipped amenities, such as on-board diagnostic systems and innovative safety features. In turn, the sale of more technologically advanced, high profit margin goods will revive industry profitability. Additionally, fuel economy standards will require auto manufacturers to outfit new vehicle platforms with fuel-efficient technology. Demand for these components will create new product focuses for wholesalers looking to expand sales accounts and increase revenue. As a result, IBISWorld projects industry revenue to grow at an annualized rate in the five years to 2019, lifted by an increase in 2014.
For more information, visit IBISWorld’s Auto Parts Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
The Auto Parts Wholesaling industry comprises operators that sell automotive parts wholesale to automobile manufacturers, automotive parts retailers and auto service providers. Sales of new tires and tubes are not included.
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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