Slamming the breaks: Rising interest rates and falling consumer confidence will prevent industry growth

The New Car Dealers industry in California has experienced steady, moderate growth over the five years to 2017. Consumer income and confidence growth has led consumers to purchase new durable goods, such as vehicles. However, operators have struggled with increased competition and thin profit margins. The previously seen robust demand growth is expected to come to an end over the next five years as consumer confidence falls slowly. At the same time, interest rates are expected to increase, causing the effective price of new vehicles to increase since most vehicles are bought on credit...purchase to read more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22

Industry Threats & Opportunities

  • Robust demand growth is expected to come to an end over the next five years as consumer confidence falls slowly
  • Consumers' ability to research, compare and buy vehicles online has significantly increased the level of competition
  • Slowing demand and continued high competition level will lead to industry exit
  • Industry Report - Industry Analysis Chapter

    The New Car Dealer industry in California is expected to grow at an annualized rate of 5.1% over the five years to 2017, reaching $104.2 billion. This includes projected growth of 1.0% in 2017. Growth has been primarily due to expanding demand as the economy continues to recover and grow from the recession. The industry has expanded its operations to meet demand, which has ramped up competition within the industry. In addition, competition has increased from sources outside the industry, further challenging existing players.Demand-driven growthGrowing consumer income and confidence have been the primary drivers of industry growth over the past five years. Personal incomes in California have grown at an annualized rate of 3.4% o...purchase to read more.

    Additional Insights for the New Car Dealers in California Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the New Car Dealers in California Industry are

  • Provision of superior after sales service
  • Use of high volume/low margin strategy
  • Internet presence
  • IBISWorld analysts also discuss how external factors such as Average age of vehicle fleet and Per Capita Disposable Income in California in the New Car Dealers in California industry impact industry performance..

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    What's in this report

    What is the New Car Dealers in California Industry?

    This industry sells new and used passenger vehicles. Vehicles include passenger cars, light trucks, sport utility vehicles (SUVs) and passenger vans. New car dealers also sell parts and provide repair services.

    Industry Products
  • New vehicles
  • Used vehicles
  • Parts and repair services
  • Finance and insurance
  • Industry Activities
  • Selling new cars
  • Selling new light trucks
  • Selling used cars
  • Selling used light trucks
  • Providing vehicle maintenance and repairs
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Average age of vehicle fleet
  • Per Capita Disposable Income in California
  • Consumer Confidence Index
  • Yield on 10-year Treasury note

  • Current Performance
  • Demand-driven growth
  • A swerve in purchasing habits
  • Service offerings
  • Chart: Revenue Growth

  • Industry Outlook
  • Demand growth hits the brakes
  • Profit and consolidation
  • Table: New Car Dealers in California Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - New Car Dealers in California Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Automobile Wholesaling
  • Car & Automobile Manufacturing
  • SUV & Light Truck Manufacturing

  • Products & Services
  • New vehicles
  • Used vehicles
  • Parts and repair services
  • Finance and insurance
  • Chart: New Car Dealers in California Industry Products and Services Segmentation

  • Major Markets
  • Consumers aged 50 or higher
  • Consumers aged 35-49
  • Consumers aged 16-34
  • Chart: Major Market Segmentation for the New Car Dealers in California Industry

  • Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs New Car Dealers in California

  • Basis of Competition
  • Internal
  • External

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the New Car Dealers in California Industry

  • AutoNation Inc., Longo Toyota/Scion, Norm Reeves Superstores, Penske Automotive Group Inc.,
  • Table: AutoNation Inc. - financial performance
  • Table: Longo Toyota/Scion - financial performance
  • Table: Norm Reeves Superstores - financial performance
  • Table: Penske Automotive Group Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the New Car Dealers in California Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the New Car Dealers in California Industry
  • Industry Revenue (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Per Capita Personal Income (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Big Three
  • Industry term for the three largest domestic automakers: General Motors, Ford and Chrysler.
  • Floor Plan Financing
  • A type of financing used to fund purchases of vehicles intended for sale.
  • Light-Duty Vehicle
  • A passenger vehicle, sport utility vehicle or truck weighing less than 14,000 pounds.
  • Powertrain
  • A vehicle's engine and transmission combination.
  • Surety Bond
  • A three-party agreement in which the third-party, or surety, agrees to fulfill contractual obligations.
  • Term Asset-Backed Securities Loan Facility (Talf)
  • A Federal Reserve program that issues asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration.
  • What Our Customers Say

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    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
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    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The New Car Dealers in California market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
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