Strong demand from emerging markets has carried the industry's performance
(PRWEB) March 18, 2013
The Global Auto Parts and Accessories Manufacturing industry has been on a bumpy road over the past five years. In general, the industry relies heavily on motor vehicle production from automakers. Since 2008, global motor vehicle production has been supported by rapid growth in China and other emerging economies. According to IBISWorld industry analyst Tony Danova, “Average household incomes in these countries have risen, which has created new demand for motor vehicles.” Consequently, motor vehicle manufacturers have opened plants at a rapid pace to satisfy burgeoning demand, and parts manufacturers have followed. Additionally, the auto parts aftermarket helps generate a significant amount of revenue, and demand for this segment rises in accordance with the number of vehicles in use. Globally, people have been holding on to their cars for longer periods, which, in turn, has supported demand for replacement parts. These trends have helped push revenue up at an annualized rate of 3.4% to roughly $1.5 trillion over the past five years, including expected growth of 1.7% in 2013.
At the same time, however, skyrocketing fuel prices and stringent emissions regulations have slowed global demand for new motor vehicles in the western nations, which has slowed automotive parts and accessories revenue growth in these regions. “Furthermore, global car and light commercial vehicle production dropped during the global economic downturn, which caused many consumers to delay new vehicle purchases,” says Danova. The drop in production meant less demand for automotive parts from original equipment manufacturer (OEM). This trend subdued the industry's growth potential over the period, not only in revenue but also in size. Because the Global Auto Parts and Accessories Manufacturing industry is highly fragmented with most players operating on a local scale, a number of operators were forced to exit during the recession, while the industry’s more globalized players, like Denso and Robert Bosch, acquired struggling companies to increase market reach.
Nonetheless, the industry will continue on its fast-pace track over the next five years as strong demand from high-growth economies supports revenue growth; demand from developed economies, on the other hand, will likely be more subdued as they continue to climb out of the economic downturn and speculate on future economic sustainability. Still, industry operators can expect demand from automakers to increase as these downstream customers continue to ramp up production in hopes that consumers will continue unleashing pent-up demand for new car purchases. Greater motor vehicle production volumes will ultimately support sales of industry products, allowing revenue to grow strongly in the five years to 2018. For more information, visit IBISWorld’s Global Auto Parts & Accessories Manufacturing industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Companies in this industry manufacture motor vehicle parts and accessories other than engines, engines parts, batteries, tires, bodies and chassis. Motor vehicle assembling is not included in this industry. Manufacturers typically supply parts and accessories to original equipment manufacturers (OEM) for use in the manufacturing of complete motor vehicles or for replacement parts in OEM dealerships. They also supply parts to the aftermarket.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.