Industry Analysis & Industry Trends
Motor vehicle part wholesalers buckled over the past five years, as the automotive sector stalled in the global downturn. Industry revenue is forecast to fall at a compound annual rate of 2.7% over the five years through 2012-13 to reach £12.3 billion. An ageing car fleet promoted demand for replacement parts. Older vehicles require more maintenance and repair than new, more technologically advanced vehicles. The number of cars on UK roads also increased over the past five years, which backed demand for replacement parts. However, industry conditions were so severe during the global downturn that industry revenue fell overall. Demand for motor vehicle parts from retailers, car dealers and carmakers weakened as consumers delayed discretionary purchases... purchase to read more
Industry Report - Starting a New Business Chapter
The costs of establishing distribution centres and employing skilled labour are the most onerous barriers to enter into this industry. A new entrant may not be able to afford to do so unless they find a niche that is yet to be served by the industry, however the fragmented nature of the industry makes entry far easier. Establishing solid downstream relationships is essential to success, but this can take time. If entrants can do so, this will provide more shelter from demand shocks.
Barriers to enter into the original equipment market are even higher. A new entrant would need to compete against already established global component manufacturers with strong relationships with car manufacturers... purchase to read more