Industry dealers will benefit from higher demand for classic cars
New York, NY (PRWEB) April 05, 2015
Companies in the Classic Car Dealers industry retail classic cars and antique cars on their premises or at regional auctions. “Classic cars are highly discretionary purchases; therefore, demand for the industry is extremely elastic among most US consumers and depends on prevailing levels of per capita disposable income,” IBISWorld Economic Analyst Nick Petrillo says in the updated report. When per capita disposable income levels fell and investor uncertainty increased during the recession, fewer consumers purchased classic and antique cars. Although per capita disposable income has gradually returned from its historic lows, many middle-class consumers have yet to resume purchases of industry vehicles due to depleted savings and relative disinterest in spending money on such high-priced assets. As a result, industry revenue growth did not occur until 2014. Despite this slow recovery, the industry appears to be back on the right track, and revenue is estimated to increase over the five years to 2015, including a robust jump in 2015.
With the economic recovery likely to yield greater purchases on classic cars from both wealthy investors and the general public, IBISWorld anticipates industry revenue to steadily grow over the five years to 2020. Demand for classic cars of all makes and models is anticipated to grow, although budget classics and American muscle cars are most poised for growth. Over the five years to 2020, revenue is forecast to grow. Industry dealers will benefit from higher demand for classic cars, which will likely push up auction prices on many of the industry's most popular models. Higher auction prices will ultimately boost industry profit margins over the next five years as a result.
Nevertheless, long-term industry growth prospects will be limited by external competition from many individuals throughout the United States who own and sell classic cars amongst themselves. “Independent sales of automobiles are extremely common and represent an increasing threat to the industry, particularly as consumers gradually increase their use of online classifieds to advertise their automobiles to a national audience,” Petrillo says in the updated report. New car dealers will also represent a major source of competition for industry dealers, as major manufacturers have begun a trend of modernizing classic models and retailing them as modern, state-of-the-art collectibles.
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 US-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.
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