Industry revenue plummeted during the recession, but has since grown alongside new car sales
New York, NY (PRWEB) December 03, 2014
The Auto Paint Customization Shops industry completes paint jobs and other exterior graphics for automobiles. Industry products and services are luxury items and, therefore, the onset of the recession caused revenue to plummet as consumers reduced discretionary spending. The industry has grown over the past five years, however, as stronger US job creation leads to higher consumer disposable incomes and improved consumer sentiment. Consequently, consumers have increasingly resumed the purchase of nonessential items such as custom paint jobs. According to IBISWorld Industry Analyst Jeremy Edwards, “Industry revenue has also been supported by an increase in new car sales, which in turn increases the number of potential industry customers as consumers seek to replace factory designs or refurbish custom cars.”
As a result, industry revenue is projected to increase at an average annual rate of 2.5% to $674.9 million over the five years to 2014, including growth of 3.0% in 2014 as stronger new car sales help boost demand for custom paint jobs.
New technology is also helping drive demand for custom paint jobs and increasing revenue by enabling shops to charge higher prices. Industry operators are not at the forefront of technological change; however, paint manufacturers continue to develop water-based paints with fewer toxins and without the requirement of primers. Future development of new paints with self-repairing properties could also boost revenue by raising the prices for industry services.
Over the next five years, industry revenue is expected to climb at a similar pace.
“Growth is expected to be strongest in the first half of the five-year period due to stronger car sales, driven by higher disposable income and persistently low interest rates in the next two years, until the Federal Reserve ends raises them,” says Edwards. Stronger business activity and increased expenditure on advertising will also benefit the industry as companies invest in wraps and graphics to help increase brand exposure. Consequently, the industry is forecast to grow over the five years to 2019.
For more information, visit IBISWorld’s Auto Paint Customization Shops in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides custom paint jobs and other exterior graphics for automobiles. Businesses in this industry customize cars to make a style statement for the consumer, making the car look unique and unlike a factory-finished car. Freight truck and trailer customization services are also included in this industry. This industry does not include original equipment manufacturer (OEM) repair and paint work.
Key External Drivers
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Products & Services
Globalization & Trade
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