Increased international trade has bolstered domestic industry demand.
New York, NY (PRWEB) October 24, 2014
Operators in the Heavy-Duty Diesel Engine Manufacturing industry primarily manufacture engines used in freight trucks, in addition to engines used in industrial machinery. During the economic downturn, demand for industry products suffered as trade flows halted, causing freight operators to delay purchasing new heavy-freight trucks. As a result, truck manufacturers cut production levels, causing demand for new engines to fall significantly. “Nevertheless, trade flows rebounded sharply following improved economic conditions and these negative trends reversed,” according to IBISWorld Industry Analyst Brandon Ruiz. Over the five years to 2014, industry revenue will likely surge high from its low recessionary base, rising at an estimated annualized rate of 10.0% to $16.1 billion.
International trade plays an intricate role for the industry as over 70.0% of revenue is derived from engines that are used for heavy-duty trucks. As domestic economic conditions improved following the downturn, freight operators experienced heightened freight volumes. “These firms purchased heavy-duty trucks, to move the imported products from port to their intended destination, and engines, to power the trucks, at higher rates as demand for their services rose,” says Ruiz. Furthermore, domestic industrial production rose in response to demand from emerging economies for construction and industrial equipment. As such, engine sales increasingly were sourced from industrial producers seeking to incorporate new machinery or upgrade existing machinery. These trends will continue to benefit the industry, driving revenue an estimated 1.5% in 2014.
Industry operators are anticipated to continue to rev their engines over the next five years, but growth will be more subdued. The global economy is anticipated to gain pace, resulting in heightened levels of international trade and demand for industrial goods. In turn, freight operators will order more engines and industrial firms will accelerate their purchases to meet demand for their goods. Industry manufacturers will be better equipped to meet enhanced regulations from the Environmental Protection Agency (EPA) in regards to fuel efficiency and emission standards amid high demand for fuel efficient engines. Industry operators that concentrate on producing fuel-efficient engines will likely be competitive over the next five years.
For more information, visit IBISWorld’s Heavy-Duty Diesel Engine Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures heavy-duty diesel engines. A diesel engine is an internal combustion engine that uses the heat of compression to initiate ignition to burn the fuel, which is injected into the combustion chamber. Top manufacturers include Cummins, Caterpillar and Navistar. These engines are used in highway vehicles (i.e. freight trucks) and machinery.
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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