As incomes return, car enthusiasts will resume spending on the industry's classic and antique cars
Los Angeles, CA (PRWEB) March 26, 2013
When per capita disposable income levels fell and investor uncertainty increased in 2008 as the recession hit, fewer consumers purchased this industry’s classic and antique cars. Consequently, Classic Car Dealers industry revenue contracted 17.4% that year. “Fortunately, the industry has since recovered on the back of rising per capita disposable income and a general economic recovery,” says IBISWorld industry analyst Kevin Boyland. Because of the periods with contrasting trends, industry revenue is estimated to increase at a relatively flat annualized rate of 0.7% to about $7.6 billion in the five years to 2013.
Companies in the Classic Car Dealers industry retail classic cars (i.e. older than 25 years) and antique cars (i.e. older than 45 years) on their premises or at regional and international auctions. Dealers may also sell third party-owned cars on consignment for a commission fee. “Because classic cars are a discretionary purchase, demand for the industry is highly dependent on per capita disposable income levels,” says Boyland. Classic and antique car selling prices range from average used-car prices (i.e. $5,000 to $15,000) up to staggering amounts for unique makes and models. For example, a rare Duesenberg Model J long-wheelbase coupe sold for a whopping $10.3 million in 2011 at a classic car dealership in California.
As economic recovery picks up steam, demand for classic cars of all makes and models is anticipated to grow. Growth will encourage more companies to enter the industry, pushing up internal competition and contributing to an already fragmented industry. This fragmented nature precludes the ability of any one firm to dominate the landscape, with most firms catering to customers on a local or regional basis and only maintaining presence in one specific market. As a result, this industry carries a low level of market share concentration. In general, many firms operate on a small scale, with a significant share operating as sole proprietorships. The average industry firm only employs about two people.
Long-term industry growth prospects will also be moderated by external competition from online-only dealers. Web-based car dealers pose a formidable external threat to the industry because these firms can market to an international audience and have lower operational costs. To a lesser extent, new car dealers pose a threat to the industry because consumers may prefer the technologically advanced features of new car models. For more information, visit IBISWorld’s Classic Car Dealers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry sells classic and antique cars. IBISWorld defines a classic car as either a foreign- or American-made vehicle that was manufactured more than 25 years ago and is no longer in production. An antique car is defined as a vehicle manufactured more than 45 years ago. Companies may sell previously purchased cars or third-party vehicles on consignment. They may also sell vehicles at an auction, but individuals who sell their own cars at an auction are excluded from this industry.
Key External Drivers
Industry Life Cycle
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Products & Services
Globalization & Trade
Market Share Concentration
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