Demand will continue to grow healthily, pushing prices upward
Los Angeles, CA (PRWEB) March 16, 2015
Semi trucks have a buyer power score of 2.7 out of 5, indicating a lack of buyer negotiating power compared to suppliers. Semi truck buyers face challenging negotiating conditions and may have difficulty obtaining pricing leverage over suppliers. The lack of buyer power is evident when looking at recent price trends. “Despite key input costs declining, such as those of wages and steel, prices have still been on the rise,” says IBISWorld research analyst Scott Winters. A lack of substitute goods and a highly concentrated market also contribute to the score. Buyers do have some negotiating power, though, via the low specialization found in the semi trucks market and the low cost of switching suppliers.
The market's unfavorable pricing trend can be attributed in part to mounting demand during the period. “Industrial production is up, as is international trade with the United States,” says Winters. “More importantly, the price of fuel dropped substantially in 2014, making trucking services much more affordable, which then prompts trucking companies to purchase more trucks.” As such, demand for semi trucks has been growing rapidly, negating any need on the part of suppliers to come down on price. Demand for trucks is also high because buyers suffer from a lack of substitutes and choice, which is made more detrimental by the highly concentrated market. Current vendors include AB Volvo, Daimler AG, Navistar International Corp. and PACCAR Inc.
The market's large network of providers and lack of specialization help keep the buyer power score from falling lower. Trucks are sold by a large network of dealers, each carrying trucks of similar design. Buyers can readily exploit this lack of specialization by pitting multiple dealers against each other to find the lowest price. Additionally, there is very little cost associated with switching to a new supplier, further boosting buyer leverage when purchasing a semi truck. For more information, visit IBISWorld’s Semi Trucks procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of semi trucks, which are heavy-duty trucks used to tow semi-trailers. These trucks are categorized as Class 7 or 8 trucks, indicating that they have a weight rating above 33,000 pounds. Semi trucks are used for local and long-distance transportation and are one of the most common methods of transporting goods in the United States. These trucks are also referred to as tractor-trailers, truck-tractors and 18-wheelers. Buyers of semi trucks commonly include trucking service providers and other large companies with fleets of trucks. This report excludes all other classes of trucks, such as delivery trucks, flatbed trucks, dump trucks and cargo trucks. It also excludes any services related to shipping, trucking or transportation.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.