Industry Analysis & Industry Trends
The Global Car and Automobile Sales industry experienced a significant decline during the global recession, as the industry is vulnerable to economic shifts in employment and spending. While demand for new and used vehicles in mature markets (e.g. Japan, Western Europe and the United States) fell during the economic downturn, the industry flourished in the emerging economies of Brazil, Russia, India and China. The release of pent-up demand for industry products will drive sales over the next five years, and the development of energy-efficient hybrid and electric vehicles is expected to lead the industry into a new era of prosperity... read more
Industry operators require salespeople, technicians and office workers to operate. In 2014, wages are expected to account for 5.8% of industry revenue, down from 5.9% in 2013. Additionally, labor costs have been volatile over the past five years. For example, wages fell 14.5% in 2009 due to the effects of the recession, but have since recovered as economic conditions improved. However, wages as a share of revenue are decreasing because revenue growth is outpacing wage growth.
Industry depreciation costs are low. By classifying vehicles as short-term assets, new car dealers tend to avoid significant depreciation expenses. Service equipment and the physical dealership are the industry's primary long-term assets... read more