The industry is returning to growth as economic conditions improve
Melbourne, Australia (PRWEB) January 31, 2013
Over the past five years, the Australian Fleet Car Leasing industry has had its highs and lows in line with volatile business and government activity. The resources boom was not enough to hold back the economic pressures from a global downturn. According to IBISWorld industry analyst Ryan Lin, “businesses contributed less to demand for the industry as most worked to cut back expenses, with business activity faltering”. On the other hand, large cashed-up mining and resources companies are inclined to directly purchase and alter entire fleets of vehicles rather than commence leases. As a result, industry revenue is expected to decline at an annualised 2.1% over the five years through 2012-13 to total $1.14 billion.
There has been a recovery over the second half of the five-year period as the global economy recovers from the blow of the global financial crisis. With business confidence and activity returning and abating resource commodity prices, the industry has recovered as private sector businesses along both the eastern and western seaboards take up fleet car leases. As a result of continual government expenditure, the Fleet Car Leasing industry has recovered in 2011-12 and 2012-13. Adding further impetus to growth and recovery are additional value added services offered by industry players, such as fleet management and servicing options. “These are providing new markets for industry players and a source of differentiation from external forms of competition”, says Lin. The industry has a high level of market share concentration, with the top four players – LeasePlan Australia Limited, ORIX Australia Corporation Limited, Fleet Partners Pty Limited and Fleetcare Pty Ltd – accounting for a large share of industry revenue. Market share concentration is high due to the benefits of economies of scale, as larger players can spread overhead costs like administration and marketing over a larger fleet of vehicles.
Over the five years through 2017-18, a continued recovery from the previous downturn is expected to drive the industry. As the economy recovers, the threat of downstream customers becoming cash rich and opting to purchase instead of lease vehicles will weigh against the industry's growth potential. With many traditional value added services expected to become industry standards, industry players will struggle to provide non-substitutable points of differentiation for customers.
For more information, visit IBISWorld’s Fleet Car Leasing report in Australia industry page.
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IBISWorld industry Report Key Topics
Participants in this industry lease cars to corporations, small businesses and government institutions, including novated leases. Fleet car leasing companies lease all forms of automotive vehicles including cars, trucks, SUVs, vans and buses.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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