Economic recovery has released pent-up demand from downstream customers
New York, NY (PRWEB) March 08, 2015
The Truck Dealers industry is recovering from its postrecessionary slump. In the aftermath of the recession, weak demand from the industry's principal markets, including the manufacturing, trucking and construction sectors, led to rock-bottom truck sales. However, recovering downstream markets and greater trucking activity have since allowed for revenue gains. In the five years to 2015, industry revenue is expected to increase strongly. According to IBISWorld Industry Analyst, Darryle Ulama, “The unusually high growth rate during the period indicates the industry is approaching revenue levels achieved during the mid-2000s.”
Industry dealers sell new and used trucks to downstream markets that require large-volume or long-distance transportation. As such, industry revenue typically moves in line with factors such as manufacturing output, trade volume and construction activity. In the past five years, economic recovery has released pent-up demand from downstream customers that postponed truck purchases in the aftermath of the recession. For example, both the local and the long-distance freight trucking industries, two of the industry's primary markets, have experienced renewed demand in the past five years. As a result, industry revenue was able to recover quickly over the period. More recently, the industry has reported a strong increase in heavy truck sales, which include class 7 and class 8 vehicles. As a result, industry revenue is expected to increase moderately in 2015.
The Truck Dealers industry is highly fragmented and has a low level of market share concentration. In 2015, no single operator will generate over 5.0% of industry revenue. “The low concentration level reflects the larger number of nonemployers operating within the industry and the industry's high level of competition,” says Ulama. Over the five years to 2015, the number of industry firms is expected to remain flat, increasing very slowly.
Steady demand from the manufacturing and construction sectors will sustain revenue growth in the five years to 2020. During this time, industry revenue is expected to rise moderately. Truck dealers will soon benefit from pre-buy activity, as the EPA implements stricter greenhouse gas emissions and fuel economy standards for heavy-duty vehicles manufactured after 2018. In the long run, however, vehicle sales may taper off as the market reaches saturation and demand tempers. Meanwhile, more stringent regulation could encourage upstream manufacturers to increase their prices in an effort to recoup the investments they make to meet fuel efficiency standards. Dealers, in turn, are expected to pass on these price hikes to end-customers.
For more information, visit IBISWorld’s Truck Dealers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is comprised of operators that sell new and used medium- and heavy-duty commercial trucks. In addition to new truck sales, many companies offer a wide variety of used trucks and new truck parts. Many dealers also provide truck repair services. This industry does not include light truck or sport utility vehicle (SUV) dealers.
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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