Maintaining truck roadworthiness means demand for some parts is largely inelastic, helping industry revenue.
Melbourne, Australia (PRWEB) November 30, 2014
Operators in the Heavy Duty Truck Parts Wholesalers industry in Australia sell locally and internationally made truck parts to retailers and repair stores, for use in the repair and maintenance of trucks. The industry, while separated from the Road Freight Transport industry by intermediaries, depends on final demand from truck drivers for parts. According to IBISWorld industry analyst Caroline Finch, “growing freight transport demand, an old vehicle fleet and increases in the number of trucks on the road favour the industry.” The performance of the Heavy Duty Truck Parts Wholesalers industry depends on demand from final markets, such as the Road Freight Transport industry. Road freight companies tend to use more trucks than any other industry. These trucks are often large, articulated trucks transporting heavy loads. Therefore, there is a large amount of wear on components, particularly tyres, brakes and transmissions.
As truck owners need to maintain the roadworthiness of their vehicles, demand for some parts is largely inelastic, which helps shore up industry revenue. “Variability in industry performance in the past five years occurred as transport companies and truck owners worked to hold off discretionary maintenance on their trucks in response to weak freight demand conditions in the wake of the global financial crisis,” says Finch. Over the five years through 2014-15, the industry has recovered from the initial dip in demand, with revenue forecast to grow at a compound annual rate of 1.9%, to $2.0 billion. In 2014-15, industry revenue is forecast to rise by 2.3%. The industry has a low level of market share concentration. Major companies include Isuzu Australia Limited.
The outlook for the Heavy Duty Truck Parts Wholesalers industry is positive, as the number of trucks registered in Australia is expected to increase, which means more parts will be required to service these vehicles. Higher demand from road freight transport will contribute to revenue growth. As logistics companies look to increase their productivity, larger trucks may be used more intensively. These require more tyres and come under greater wear due to their heavier loads. Consequently, demand for tyres and brakes required for these vehicles is anticipated to grow over the next five years.
For more information, visit IBISWorld’s Heavy Duty Truck Parts Wholesalers industry in Australia report page.
Establishments in this industry wholesale truck parts and supplies for commercial trucks. Products include drive train parts, tyres, brake pads and other consumables. The industry does not supply parts for off-road vehicles such as mining trucks.
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