ATVs are a discretionary purchase, so increases in consumer spending have benefitted operators.
New York, NY (PRWEB) November 21, 2014
Over the five years to 2014, revenue for the ATV Manufacturing industry is expected to increase, bolstered by improvements in economic conditions, particularly at the consumer level. ATVs are four-wheeled vehicles that are equipped with wide tires that have a deep tread suitable for various conditions and terrain. “Industry operators manufacture all-terrain vehicles (ATVs) for recreational and utility purposes, in addition to associated vehicle parts,” according to Industry Analyst Brandon Ruiz. Because ATVs are primarily a discretionary purchase, industry revenue tends to be cyclical in nature. As a result, sales typically ebbs and flows with fluctuations in disposable income. As disposable income rises, demand at the retail level grows and subsequently stimulates demand at the manufacturing level. To this end, IBISWorld expects industry revenue to grow at an annualized rate of 7.8% to $4.9 billion over the five years to 2014, including an estimated escalation of 2.1% in 2014.
The US Federal Reserve's economic policies, particularly those related to setting historically low interest rates, are anticipated to benefit industry operators over the five-year period. During periods of low interest rates, big-ticket discretionary items, such as ATVs, are typically financed at a higher rate to take advantage of lower borrowing costs. Additionally, these policies have put downward pressure on the value of the US dollar. “As the US dollar depreciates relative to other currencies, domestic goods and services become more affordable abroad, and thus more desirable,” says Ruiz. Consequently, exports are anticipated to soar higher, lifting industry revenue in the process.
Over the five years to 2019, the ATV Manufacturing industry is anticipated to continue its upward trend, albeit at a slower rate. Disposable income is expected to rise, stimulating demand for recreational purchases. Moreover, demand related to agriculture, forestry, fishing and hunting is expected to increase, bolstering demand for utility ATVs. Although the industry is anticipated to grow over the next five years, an expected rise in interest rates will likely hamper industry revenue growth. As interest rates increase, consumers will be less willing to finance their vehicle purchases, resulting in shrinking demand for ATVs. Nevertheless, positive trends are expected to outweigh rising interest rates and industry revenue is anticipated to grow over the five years to 2019.
For more information, visit IBISWorld’s ATV Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures all-terrain vehicles (ATVs) and their associated parts. ATVs are four-wheeled vehicles that are typically equipped with wide tires that have a deep tread suitable for various conditions and terrains. They can be used for recreation or utility purposes.
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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