When the global financial crisis took hold of the world economy, car retailing was not spared. In the second half of 2008, car sales crashed and retailers started taking drastic steps to reduce inventory. Orders were put on hold and car wholesaler revenue fell. According to IBISWorld industry analyst Aries Nuguid, "Pent up consumer demand led to a rebound in the number of cars sold, but a competitive environment led to price cuts". The weak prices caused continued revenue declines in the following two years. Demand has since improved and revenue is expected to grow 3.8% in 2011-12, backed by an increase in imported vehicles and pent-up demand from the private market. However, the improvement will not be enough to outweigh declines following the global downturn. As such, revenue for the Car Wholesaling industry is expected to decline at an annualised 2.1% over the five years through 2011-12 to reach $35.7 billion.
Conditions will improve for car wholesalers over the next five years. "A stronger dollar, along with lower vehicle tariffs, will support new car sales", Nuguid adds. Green trends will persist, and wholesalers that include fuel-efficient motor vehicles in their product range are set to grow within the next five years. The major hurdle will be rising fuel prices, which will slow the demand for car purchases. However, high fuel prices will also support the shift towards fuel-efficiency. Industry revenue is forecast to increase over the five years through 2016-17.
The Car Wholesaling industry has a medium level of market share concentration. Market share concentration declined over the past five years as two major players, GM Holden and Ford Motor Company, lost market share to smaller players. The two major players lost market share because their product mix relied heavily on large cars, which did not match shifting consumer demand towards smaller fuel-efficient cars. Smaller players, such as Hyundai, with a product mix of smaller cars gained market share. The four largest players in the industry are Toyota, GM Holden, Ford and Mazda.
For more information, visit IBISWorld's Car Wholesaling report in Australia industry page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Companies in this industry sell new and used passenger motor vehicles (such as cars, SUVs and utes) to car retailers, as well as to fleet users such as the government.
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
About IBISWorld Inc.
Recognised 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 Australian 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
Read the full story at http://www.prweb.com/releases/2012/5/prweb9527288.htm
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