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With the impending closure of domestic motor vehicle manufacturers, the Automotive industry is set to face some major operational and structural changes. For this reason, industry research firm IBISWorld has updated its report on the Automotive Industry in Australia.
Melbourne, Australia (PRWEB) July 08, 2014
The Automotive Industry in Australia encompasses a range of smaller industries that have performed variably over the past five years. A recovery in new car sales following the global financial crisis has characterised the five years through 2014-15. Consumer sentiment and business confidence have strengthened, stimulating demand for new cars. Demand grew, especially for imported vehicles. Wholesalers and retailers benefited from growth in imported vehicle sales, but this was to the detriment of domestic motor vehicle manufacturers and upstream parts manufacturers. Industry revenue is forecast to rise by a compound annual 1.5% over the five years through 2014-15, to be worth $170.8 billion.
New car sales have recovered, with consumers shifting their demand towards more fuel-efficient small cars as petrol prices surged. The trend took consumers away from locally manufactured large cars to imported small cars and compact SUVs. This, coupled with a high Australian dollar and a reduction in import tariffs, led to significant import penetration. Car dealers and wholesalers have thus achieved strong growth over the past five years, to the ultimate detriment of local manufacturers. IBISWorld industry analyst David Whytcross states, with falling sales of locally manufactured vehicles, low production volumes have caused economies of scale to fall. These factors led to Toyota, GM Holden and Ford announcing their intention to exit Australian manufacturing over the next five years. The announcements by these companies, and slowing new car sales, are forecast to result in a 1.3% revenue decline in the current year. The exits of major operators from manufacturing will cause a transformation of the industry. According to Whytcross, domestic passenger vehicle manufacturing will cease to exist, and wholesalers will grow strongly as consumers have no locally manufactured vehicles to purchase. Parts manufacturers are expected to decline as they are unable to replace the revenue from transactions with local motor vehicle manufacturers. Despite the exit of manufacturers, the expected abolition of import tariffs and improved vehicle affordability will drive some industry revenue growth.
The Automotive Industry has a low level of concentration as it covers the entire automotive supply chain, which spans from parts manufacturers to the car dealer. As a result, there is a wide range of companies operating at various levels of the automotive supply chain. Concentration differs across different levels of the supply chain. Most companies in the industry are small or medium-size enterprises that only account for a small percentage of revenue. The smallest ones are mechanics, which are often owner-operators. At the other end of the scale, there are only three motor vehicle manufacturers in Australia and they each account for a large part of the Motor Vehicle Manufacturing industry. Major players include Toyota Motor Corporation Australia, GM Holden and Ford Motor Company of Australia.
For more information, visit IBISWorlds Automotive Industry report in Australia industry page.
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IBISWorld industry Report Key Topics
The industry includes car manufacturers, parts suppliers, car dealers and mechanics. These companies are generally engaged in the design, research, development, manufacture, sale and maintenance of motor vehicles and parts. Motor vehicles refer to cars, utes, station wagons, SUVs and people movers sold to the public, businesses or the government. The report does not cover vans, motorcycles, buses or heavy commercial vehicles such as trucks.
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 nations 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.
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