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The Used Car Dealers industry has since shifted gears since the economic downturn and has taken off at full speed. During the recovery, relatively high unemployment and limited disposable income caused consumers to cut back on discretionary purchases, such as cars. However, as economic conditions improved and consumer spending began to rise again, consumers released pent-up demand for big-ticket purchases, such as automobiles. IBISWorld Economic Analyst Brandon Ruiz says in the updated report moreover, consumers, still wary of the economic climate, increasingly opted to purchase used vehicles over new ones, helping to boost sales. This renewed demand has remained consistent and over the five years to 2015. Consequently, revenue for the industry is expected to grow, including a jump in 2015.
Profit, measured as earnings before interest and taxes, is also expected to increase over the five-year period, supported by higher average selling prices. Although used vehicle prices declined in 2010, they began to rise in 2011 in light of limited inventory. The recession reduced fleet purchases and the number of leased vehicles, which caused a shortage in the one-to-five-year-old used vehicles segment, Ruiz says in the updated report. Despite these positive trends, industry operators are expected to face heightened competition from external competitors, such as new car dealers and individual sellers, which will likely inhibit profit growth over the period.
These trends are expected to continue in the five years to 2020. Over the period, industry revenue is projected to grow. Rising demand for used vehicles, particularly for vehicles five years and older, is anticipated to drive growth prospects. Although many industry operators are expected to forgo significant expansion of their operations in favour of increasing inventory at their existing retail outlets, industry operators are anticipated to expand inorganically via acquisition. For example, AutoCanada, one of the largest domestic players, is expected to continue its trend of acquiring small dealerships to extend its geographical reach.
For more information, visit IBISWorlds Used Car Dealers in Canada in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry sells used passenger vehicles, including cars, light trucks, sports utility vehicles and vans. Used car dealers also provide parts and repair services, as well as financing and insurance.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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