Disposable income levels, are anticipated to improve, aiding demand for new vehicles.
New York, NY (PRWEB) March 27, 2015
Over the five years to 2015, revenue for the Auto Parts Wholesaling industry is expected to trend higher, bolstered by rebounding economic conditions, particularly at the consumer level. As disposable income levels rises, consumers are anticipated to release pent-up demand for new vehicles. “In light of a resurgence in demand for automobiles, automakers are anticipated to increase production levels, stimulating demand for upstream supplies, such as auto parts,” according to IBISWorld Industry Analyst Brandon Ruiz. To this end, industry revenue is anticipated to grow at an annualized rate of 4.6% to $18.2 billion over the five years to 2015, with an estimated 1.9% jump in 2015. Although the industry is expected to grow over this period, growth rates are inflated due to the industry starting at a low recessionary base.
International trade is accounted for at the manufacturing level. However, industry operators are highly dependent on the United States. Because the US population is roughly 10 times more than the domestic population, the market for automobiles is greater. As a result, industry operators typically establish a close relationship with automakers in the United States to lift industry revenue higher. “Despite this relationship, the industry is also reliant on domestic economic conditions,” says Ruiz. Fortunately, the number of motor vehicle registrations is anticipated to trend higher over the five years to 2015, which will prompt automakers to increase production levels, thus stimulating demand from upstream suppliers, such as auto parts wholesalers.
Over the five years to 2020, the Auto Parts Wholesaling industry is expected to grow. Economic conditions, such as disposable income levels, are anticipated to improve, stimulating demand for new vehicles. Moreover, consumer confidence is expected to rise, which will also indirectly benefit industry operators. Despite these positive trends, potential threats may inhibit the industry's growth. Interest rates are anticipated to rise, which will make financing automobiles more costly, therefore less attractive. Moreover, the world price of steel is expected to increase, which will likely impact industry profit margins. Because automakers typically have purchasing power over upstream suppliers, the rising cost of steel will likely have to be absorbed by industry operators. Nevertheless, demand for automobiles is anticipated to stay strong over the period, which will bode well for the industry.
For more information, visit IBISWorld’s Auto Parts Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry is primarily engaged in wholesaling new and rebuilt automotive parts and accessories, auto body and upholsterers' suppliers, and automotive chemicals. Sales of new tires and tubes are not included.
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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