London, United Kingdom (PRWEB) December 06, 2012
Soaring fuel prices sent Britons away from fuel-inefficient, petrol-run cars and toward smaller diesel-run vehicles. According to IBISWorld industry analyst Aries Nuguid, “the consumer shift hurt Motor Vehicle Manufacturing industry as the majority of cars still produced are the more traditional and less fuel-efficient vehicles”. However, this trend alone does not explain the 23.7% fall in industry revenue over 2009-10. The main culprit for this disastrous performance was the recession. When the financial crisis hit, business and consumer confidence plummeted. Sales to businesses and individuals plunged as customers became more wary of unnecessary spending. Demand from major export markets such as the United States, Germany and Belgium fell. Manufacturers had no choice but to reduce production drastically.
Conditions have since improved. Production rose in 2010-11, resulting in 19.9% revenue growth for the year. Production has continued growing, albeit off a low base. The European economy will continue to be fragile, which will limit export growth. This will be offset by higher demand from the US market and improvement in the domestic market. Consequently, revenue is forecast to grow 6.8% in 2012-13. The recovery was not quite enough to offset the dramatic drop in revenue that occurred in the global downturn. Overall, revenue is estimated to grow at a stagnant 0.6% over the five years through 2012-13 to reach £42.6 billion.
Nuguid adds, “As the economy strengthens, demand and production will be more stable”. Business and consumer confidence will strengthen over the next five years. Fuel-efficiency trends will support production, with petrol-electric hybrid and electric cars manufacturing expected to take place domestically in the next few years. However, manufacturers will continue to feel pressure from import competition. Furthermore, domestic manufacturers will face challenges in European export markets due to high levels of sovereign debt. Consequently, industry revenue is forecast to decline slightly over the five years through 2017-18.
The Motor Vehicle Manufacturing industry has a high level of market share concentration with the top four players accounting for an estimated 72.2% of revenue. Major companies include Tata Motors, Ford, Nissan, GM, BMW, Toyota and Honda.
For more information on the Motor Vehicle Manufacturing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry manufacture and assemble motor vehicles. Motor vehicles include passenger cars, commercial vehicles (such as lorries), buses and special-purpose vehicles (such as snowmobiles and fire engines). Businesses also make motor vehicle engines and vehicle chassis.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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