The Australian Automotive industry is growing due to rising new car sales, improved household disposable income and increased affordability of new cars. This growth has benefited new vehicle wholesalers and dealers in particular and also the automotive repair and maintenance sector. Growth has stalled somewhat with the closure of Australia’s largest automotive manufacturers (Toyota, Holden and Ford) who were negatively impacted by changing consumer demands and by having higher manufacturing costs than international manufacturers.
The industry going through a period of rapid change as it attempts to stay abreast of new car technology and changing consumer preferences with a skills shortage impacting some sectors. Consolidation and specialisation is likely to increase. (Source: Windle, P. IBISworld. Jan 2017).
Growth in the Commercial Vehicle industry was hit particularly hard by the Global Financial Crisis as businesses put off large purchases and financial institutions tightened lending regulations. But as the economy revived there was pent-up demand for such purchases and the industry experienced significant growth in 2009-10. This was followed by a period of slow growth as demand for commercial vehicles remained low until 2012-13.
Growth in the commercial vehicle industry seems to ebb and flow, driven by a combination of demand, economic conditions and Government incentives. There appears to be an increase in sales recently with low interest rates and a tax incentive for purchases of vehicles under $20,000. However, many in the motor industry would like to see this threshold increased so businesses could purchase safer, more fuel-efficient, environmentally friendly vehicles. With plans to implement more stringent fuel emissions standards in the future, it is likely that businesses would be encouraged to purchase such vehicles in order to comply with Government standards, and also reduce costs on rising fuel prices and vehicle servicing. It is forecast that the Commercial Vehicle industry will experience slow growth for a number of years as businesses begin to comply with these changes.
Demand for farm and industrial machinery equipment is being fueled by growth within the engineering and construction (public and private) and the gas mining sectors. Demand is also benefiting from stable climatic conditions.(Source: Johnson, S. IBISworld. Oct 2016)
Despite the volatility of crude oil prices, profitability within the fuel retailing sector is continuing. Diesel sales are increasing but petrol is the highest seller. Industry ownership is fluid as fuel retail outlets are being sold by petrol companies to supermarket chains. Profitability may be impacted as consumers adopt vehicles with alternative drive trains (i.e. electric powered). This is offset by the growing numbers of Australian registered vehicles requiring fossil fuels. (Source: Magner, L. IBISWorld. Feb 2017)
As the Motor Vehicle Body, Paint and Interior Repair industry tend to rely on vehicle accident repairs to generate revenue, new automobile safety systems and reduced vehicle accident rates have negatively impacted revenue creation. These negative impacts for industry are offset by the growing fleet of Australian registered vehicles and the higher discretionary income of consumers. Profitability is often reliant on business arrangements with insurance companies. (Source: Johnson, S. IBISworld. Dec 2016)