Industry Analysis & Industry Trends
The Motor Vehicle Dealers industry has had a bumpy ride for the past five years, despite rebounding strongly after the global financial crisis. Industry revenue has declined, largely due to high fuel prices encouraging consumers to purchase smaller, cheaper and more fuel-efficient cars. As a result, dealerships have been selling higher volumes of cheaper small cars and lower volumes of more expensive large cars, resulting in per-unit revenue declining. Additionally, the combination of strong price competition, improved production efficiencies overseas, a reduction in the motor vehicle tariff and a high Australian dollar has forced overall prices down. While lower prices have benefited the industry by supporting demand, industry revenue is forecast to decline at an annualised 0.6%... purchase to read more
Industry Report - Industry Investment Chapter
Capital intensity is moderate in the Motor Vehicle Dealers industry. For every dollar industry operators spend on wages, $0.16 is invested in capital.
Retail industries are typically labour-intensive as staff are required to make sales and carry out administrative work. Skilled salespeople can generate significant business activity for dealers and are often paid commission, benefiting from increased sales. However, due to high demand for new cars over the past five years, industry operators have reinvested in their facilities, resulting in increased capital intensity.
Dealers that sell new vehicles tend to have substantially higher capital intensity than those that sell only used vehicles... purchase to read more