Compact SUVs are expected to be the major area of growth for the industry, as they are relatively new to the market
Melbourne, Australia (PRWEB) November 17, 2014
The Motor Vehicle Dealers industry has driven along a bumpy road over the past five years, despite rebounding strongly following the global financial crisis. According to IBISWorld industry analyst Andrei Ivanov, “High fuel prices have been the main reason for the industry's revenue decline, as consumers have shifted their preference towards more fuel-efficient small cars, which have cheaper price tags.” Dealerships have been selling higher volumes of cheaper small cars and lower volumes of more expensive large cars, resulting in per-unit revenue declining. The combination of strong price competition, improved production efficiencies overseas, a reduction in the motor vehicle tariff and a high Australian dollar has forced overall prices down. While lower prices have benefited the industry by increasing demand, they are expected to result in an annualised decline of 0.4% over the five years through 2014-15. Revenue has grown steadily since 2011, with high petrol prices promoting large sales volumes of small cars and compact SUVs. Industry revenue is forecast to total $61.7 billion in 2014-15, down 3.1% on the previous year due to weak demand.
Sales of new cars are expected to grow slowly over the next five years, as consumers that are already benefiting from their small cars' fuel-efficiency have less need to purchase another new vehicle. “Compact SUVs are expected to be the major area of growth for the industry, as they are relatively new to the market,” says Ivanov. The motor vehicle tariff is expected to be abolished during the next five years, as local motor vehicle manufacturers cease production in Australia, but a depreciating Australian dollar will push up imported motor vehicle prices.
The Motor Vehicle Dealers industry exhibits low market share concentration. The industry has a large number of dealerships servicing the new and used car markets in Australia. Market share concentration has remained steady over the past five years, but is expected to increase over the next five years. As the largest industry players continue to acquire their competitors over the next five years, their rate of expansion is expected to exceed that of the industry, causing their market share to rise. However, growth in the level of concentration will be limited by the large number of small, independent dealers that compete primarily in a limited geographic or prime market.
For more information, visit IBISWorld’s Motor Vehicle Dealers industry in Australia report page.
The Motor Vehicle Dealers industry includes dealerships primarily engaged in selling new or used motor vehicles to consumers, companies and government entities.
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Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
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