Rising consumer confidence will boost demand from automakers, spurring industry growth
Los Angeles, CA (PRWEB) December 08, 2012
The fortunes of the Automobile Transmission Manufacturing industry are closely linked to the performance of motor vehicle manufacturers. Over the past five years, domestic car and light truck production in the United States went on a bumpy road as consumer demand ebbed and flowed with the economy. “High gas prices, dwindling discretionary income and a lack of financing opportunities drove consumers away from new-vehicle purchases during the recession,” says IBISWorld industry analyst Antonio Danova. “However, steady economic improvement since 2010 facilitated greater vehicle purchases, creating higher demand for transmissions as automakers ramped up production.” Over the five years to 2012, industry revenue is expected to contract 0.5% per year on average to $36.4 billion. Moreover, sustained demand from consumers for new cars is keeping production up, facilitating higher demand for transmissions and ushering in expected growth of 4.7% during 2012.
Automakers combated the demand shortage for vehicles during the recession by offering more compact, fuel-efficient and consumer-friendly automobiles. According to Ward's Auto, a leading automotive news and analysis publication, recent consumer trends have benefited compact, diesel and hybrid vehicles because of their fuel efficiency. “Over the next five years, transmission manufacturers will look to innovate their products to complement these new, fuel-efficient engines with enhanced vehicle performance,” adds Danova. For example, industry player Schaeffler Group is already developing an entire line of automated transmission gearboxes intended to work well with high-efficiency engines. Over the next five years, successful manufacturers will invest in similar technology to accommodate the changing trends in automobile production. The Automobile Transmission Manufacturing industry has a low level of concentration; major players Dana Holding Corporation and American Axle & Manufacturing Holdings are the only firms that hold significant market share. Many of the automotive components manufactured by this industry are relatively low value-added commodities, like gears and differentials, which are easy to contract out to smaller operators. The largest companies in this industry primarily focus on the more technologically intensive segments of this industry, such as transmissions, torque converters and transaxles.
In the five years to 2017, the Automobile Transmission Manufacturing industry will put the volatility of the past five years in the rearview mirror. Automakers are upping demand for transmission parts and will continue to do so as vehicle sales rise. Additionally, most major players in this industry have significantly trimmed pension liabilities and long-term debt, vastly stabilizing their operating costs and improving profitability. This renewed downstream demand will, in turn, drive an increase in industry revenue through 2017. For more information, visit IBISWorld’s Automobile Transmission Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture motor vehicle (cars and light, medium and heavy-duty trucks) transmissions, parts for transmissions and powertrain parts. Industry products include clutches, gears, differentials and axle bearings.
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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