New Car Dealers in Canada Industry Market Research Report Now Available from IBISWorld
The New Car Dealers industry faced recessionary declines in 2008 and 2009, but has since made a u-turn and is expected to maintain positive growth through 2017. For these reasons, industry research firm IBISWorld has added a report on the New Car Dealers industry to its growing industry report collection.
Los Angeles, CA (PRWEB) February 15, 2013
The New Car Dealers industry stalled momentarily over the five years to 2012. The recession that began in late 2008 and continued through 2009 reduced employment and in turn consumer confidence and per capita disposable income levels. Consumers facing unemployment and falling disposable income were reluctant to make discretionary purchases, particularly large ones like new vehicles. Moreover, higher fuel prices further hindered industry demand. Over the five years to 2012, the price of oil has increased at an average annual rate of 8.2%. As a result, the industry experienced revenue declines of 2.8% and 4.3% in 2008 and 2009, respectively. However, as the economy began to recover in 2010, so did demand for industry products and services. Over the five years to 2012, industry revenue has increased at an average annual rate of 0.5% to $9.4 billion, including growth of 3.2% in 2012. Similarly, profit also suffered during the past five years. “Over the past five years, profit margins have contracted due to price-based competition brought on by contracting demand; in 2007, profit margins averaged about 1.9% of revenue for companies in the industry,” says IBISWorld industry analyst Radia Amari. In 2012, profit, measured by earnings before interest and taxes (EBIT), accounts for about 1.7% of revenue.
New vehicle models, including more fuel-efficient vehicles, lower interest rates, higher home prices and rising consumer confidence are supporting renewed demand for the New Car Dealers industry. According to Amari, these factors, in addition to rising disposable income and employment levels, will further support industry growth during the five years to 2017. Improving economic conditions will boost employment, disposable income, consumer confidence and corporate profit levels, which will fuel industry expansion. At the same time, heightening regulation of new vehicles will further drive industry growth. Over the next five years, the government is likely to adopt new fuel-efficiency standards that will require new vehicle introductions that will support demand. At the same time, the industry will face increasing consolidation.
The New Car Dealers industry has a low level of market share concentration. The industry is highly fragmented, with one dealer (i.e. AutoCanada) generating more than 5.0% of industry revenue. In 2012, the top four industry players will generate less than 20.0% of revenue. According to Industry Canada, 11.0% of industry dealers are nonemployers; the remaining 89.0% have one or more employees. Consolidation has increased over the past five years, as larger automotive groups buy out smaller independent dealers. Additionally, a greater number of new car dealers are retiring. According to a March 2012 PwC Automotive Dealer Trendsetter Survey, 30.0% of Canada's stand-alone, or single-point, dealers will likely be bought out over the next year or be semi-retired. The same study reveals that 75.0% of new car dealers will be fully retired within the next decade. For more information, visit IBISWorld’s New Car Dealers in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry sells new and used passenger vehicles. Vehicles include passenger cars, light-duty trucks, sport utility vehicles (SUVs) and passenger vans. New car dealers also sell parts and provide repair services.
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 and Canadian 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.ca or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2013/2/prweb10435992.htm