Amid economic uncertainty, industry operators have had to streamline operations
New York, NY (PRWEB) March 24, 2015
The Truck Rental industry operated in a volatile environment over the past five years. The recession and its aftermath led to decreased activity in the truck transportation sector and markedly decreased housing construction activity; as a result, demand from the commercial and consumer markets waned. Amid the tough economic climate, many surviving trucking companies, which represent a key customer market, opted for leasing instead of purchasing vehicles outright to improve flexibility and lower operational costs.
According to IBISWorld Industry Analyst David Witter, “given the economic uncertainty, industry operators have had to streamline operations and improve efficiencies to maintain high profit margins.” One way the industry's largest operators maintained and expanded economies of scale was through mergers and acquisitions. For example, major player Ryder completed five industry-related acquisitions from 2009 to 2011. After dropping significantly due to the economic climate, however, players have returned to the industry. The number of enterprises is expected to grow.
Following significant recessionary declines, a government stimulus package spurred demand in the housing and construction markets through various programs. These programs indirectly benefited the Truck Rental industry by increasing the economic health of consumers through decreased tax burdens and by increasing the incentive to build houses through tax incentives and low interest rates. “As key users of industry products recovered from the recession, truck rental revenue increased as well. In the five years to 2015, industry revenue is expected to increase,” says Witter.
Increasing emissions and fuel-efficiency regulations are anticipated to drive demand from the commercial market going forward. Regulation aimed at lowering emissions from long-haul tractor-trailers and large pickup trucks 23.0% by 2018 will require downstream customers to either purchase or lease new vehicles. IBISWorld expects that trucking companies and fleet operators will opt to lease their vehicles from industry operators as they seek more stability in their cost structures. As this trend persists and housing construction activity continues to grow, revenue is forecast to increase over the five years to 2020.
For more information, visit IBISWorld’s Truck Rental in Canada industry report page.
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IBISWorld industry Report Key Topics
The Truck Rental industry primarily rents or leases trucks, truck tractors, utility trailers, semitrailers, recreational vehicles (RVs) and buses without drivers. Vehicle retailing activity is excluded from this industry. Companies that rent or lease industrial trucks and equipment, such as forklifts, are covered in the Industrial Equipment Rental and Leasing industry (IBISWorld report 53249CA).
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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