Research company IBISWorld has released a new report analysing the health of the truck parts industry, saying the industry has recovered “relatively well” over the past five years. According to the report, transport companies held off on maintenance at the beginning of the five-year period, causing a slight decline, but this was quickly offset by growing demand from downstream industries.
The truck parts industry revenue is forecast to grow by 3.5 per cent in 2013-14. However, the performance of the heavy-duty truck parts wholesalers industry in Australia is highly dependent on demand from the road freight transport industry.
“Road freight companies tend to use more trucks than any other industry,” said Caroline Finch, IBISWorld industry analyst. “These trucks are often large, articulated trucks transporting heavy loads, and as such, there is a large amount of wear on components, particularly tyres, brakes and transmissions.”
Demand from road freight has been recovering over the past five years to provide a boost to industry revenue, which is forecast to grow at a compound annual rate of 1.3 percent over the five years through to 2013-14 to reach $2.2 billion.
“The heavy duty truck parts wholesalers industry has a low level of industry volatility, because it is protected by regulation, to the extent that trucks have to get a minimum level of maintenance to be roadworthy,” said Finch.
Reportedly, the outlook for the heavy duty truck parts wholesalers industry industry remains positive. The number of trucks registered in Australia is expected to increase, which means more parts will be required to service them. Higher demand from road freight transportation will also contribute to revenue growth.
As logistic companies look to increase their productivity, larger trucks may be used more intensively. These require more tyres and come under greater wear due to their heavier loads. Consequently, tyres and brakes are anticipated to grow as a product segment.