Nov 19 2020
As Australia returns to semi-normal economic conditions in the wake of the COVID-19 pandemic, demand for transport has begun to recover. However, the pandemic is anticipated to cause a long-term shift in the types of transport that consumers use.
‘Demand for shared transport, including services provided by the Public Transport and Ridesharing industries, is expected to remain subdued in 2020-21. However, a stronger rebound is anticipated in the Motor Vehicle Dealers, and Bicycle Retailing and Repair industries’, said IBISWorld Senior Industry Analyst Yin Yeoh.
This change in transport preferences is forecast to persist beyond the COVID-19 pandemic, as consumers adopt new transport habits.
Bikes over buses
Revenue across the Public Transport industry declined by 7.8% in 2019-20, and is expected to decline by a further 4.9% in 2020-21. In contrast, revenue across the Bicycle Retailing and Repair industry surged by 5.2% in 2019-20, and is expected to increase by a further 3.2% in 2020-21, to total $673.1 million. An influx of demand has resulted in bicycle retailers becoming one of the few industries to grow during the pandemic.
‘Supply shortages have confronted many bicycle retailers. Amid strong global demand, limited stock has been diverted to larger markets in America and Europe, while Australian dealers have struggled to secure stock. While demand will likely remain high during the upcoming Christmas season, many buyers may be disappointed by a lack of options,’ said Ms Yeoh.
State and local governments have welcomed strong consumer uptake of bicycles, due to the health, road congestion and environmental benefits of cycling relative to other modes of transport. Expenditure on cycling infrastructure is projected to ramp up over the next five years.
Motor vehicle sales making a comeback
The Motor Vehicle Dealers industry reported 81,220 new vehicle sales in October 2020, representing a fall of 1.5% from sales numbers in October 2019. Revenue across the industry is expected to decline by 4.4% in 2020-21, to total $59.8 billion. While vehicle dealerships have endured a challenging period, the industry is anticipated to return to growth over the next 12 months.
‘The number of monthly vehicle sales in Australia has declined consistently for 31 months. However, the industry is projected to turn the corner after the COVID-19 pandemic, particularly as consumers remain wary of public transport. Sales of new passenger motor vehicles are forecast to rise at an annualised 0.7% over the five years through 2025-26,’ said Ms Yeoh.
Notably, the number of electric vehicle sales has doubled between October 2019 and October 2020. Overall, revenue for the Automotive industry, which comprises motor vehicle manufacturers, wholesalers, retailers, parts suppliers and mechanics, is expected to contract by 2.2% in 2020-21, but grow by 1.4% in the following financial year.
While demand for motor vehicles is anticipated to recover, shared motor vehicle transport will likely remain subdued. The Ridesharing Services industry, in which Uber Australia commands a market share of 85.7%, is expected to contract by 6.6% in 2020-21, to $693.8 million.
‘Ridesharing has suffered from consumers being cautious about sharing a small confined space with a driver or other passengers. While revenue is anticipated to rebound by 25.2% in 2021-22, overall revenue is not expected to surpass the highs of 2018-19 until 2022-23,’ said Ms Yeoh.
Outlook for public transport
While demand for public transport is expected to remain subdued in 2020-21, it is forecast to recover over the next five years. Revenue for public transport is forecast to increase at an annualised 4.6% over the five years through 2025-26, to reach $31.7 billion.
‘Renewed state government funding for public transport infrastructure and services is projected to boost passenger capacity and encourage commuter use. Population growth in regional and rural areas is set to be a key focus for public transport investment,’ said Ms Yeoh.
IBISWorld reports used to develop this release:
- Public Transport in Australia
- Ridesharing in Australia
- Motor Vehicle Dealers in Australia
- Bicycle Retailing and Repair in Australia
- Automotive Industry in Australia
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647