Engine troubles: External competition will inhibit profit growth in the industry

The Used Car Dealers industry in Canada has shifted gears and taken off at full speed over the five years to 2018. As economic conditions have improved and consumer spending has increased during the five-year period, consumers have released pent-up demand for big-ticket purchases such as automobiles. Industry profit margins have also expanded over the past five years, supported by higher average selling prices. Vehicle prices began to rise during the first half of the five-year period due to limited inventory. However, the overnight rate is expected to rise significantly in coming years, making vehicle financing more expensive and less desirable. As a result, demand for used vehicles is expected to slow during the upcoming period...read more.

Industry Statistics & Market Size
Revenue
$10bn
Annual Growth 13-18
7.5%
Forecast Growth 18-23
Profit
Employment
19,025
Businesses
7,839
Market Share of Companies

Industry Threats & Opportunities

  • With the overnight rate expected to rise significantly in coming years, demand for used vehicles is expected to slow
  • High gasoline prices typically hamper new and used vehicle sales
  • Rising overnight rates are expected to hamper industry growth
  • Industry Report - Industry Analysis Chapter

    The Used Car Dealers industry in Canada has experienced strong growth over the past five years, as improving economic conditions have encouraged consumers to release pent-up demand for big-ticket purchases, such as used vehicles. Additionally, while per capita disposable income has increased steadily during this period, high levels of consumer debt and recent shocks to the Canadian economy have caused many consumers to remain cautious about making major investments. This has driven consumers to purchase relatively affordable used cars, rather than pricier new vehicles. As a result of these positive factors, industry revenue is estimated to increase at a substantial annualized rate of 7.5% to $9.9 billion over the five years to 2018, including expected growth of 2.9% in 2018 alone...purchase to read more.

    Additional Insights for the Used Car Dealers Industry

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

  • Provision of superior after-sales service
  • Superior financial management and debt management
  • Effective cost controls
  • IBISWorld analysts also discuss how external factors such as Per capita disposable income and External competition for the Used Car Dealers industry in the Used Car Dealers industry impact industry performance..

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    What's in this report

    What is the Used Car Dealers Industry?

    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.

    Industry Products
  • Used vehicles
  • Parts and services
  • Financing and insurance
  • Industry Activities
  • Selling used cars
  • Selling used light trucks
  • Wholesaling used vehicles
  • Offering vehicle financing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Per capita disposable income
  • External competition for the Used Car Dealers industry
  • World price of crude oil
  • Overnight rate

  • Current Performance
  • Renewed demand and rising prices
  • Volatile gas prices
  • Improving quality
  • Chart: Revenue Growth

  • Industry Outlook
  • Rising demand
  • Supply trends
  • Table: Used Car Dealers Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Consumers in Canada

  • Key Selling Industries
  • Auto Parts Stores in Canada
  • Automobile Wholesaling in Canada
  • Car Body Shops in Canada

  • Products & Services
  • Used vehicles
  • Parts and services
  • Financing and insurance
  • Chart: Used Car Dealers Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Prime customers
  • Subprime customers
  • Nonprime customers
  • Super prime customer
  • Deep subprime customers
  • Chart: Major Market Segmentation for the Used Car Dealers Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesOther
  • Chart: Cost Structure Benchmarking – Sector vs Used Car Dealers

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Used Car Dealers Industry

  • Industry Globalization
    AutoCanada Inc.,
  • Table: AutoCanada Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Used Car Dealers 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 Used Car Dealers Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Per capita disposable income (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Car Lease
  • When a financier purchases a car on behalf of the customer, and then leases the vehicle to the customer in return for monthly rental payments.
  • Curbstoners
  • Dealers that buy, sell and trade used vehicles without a licence.
  • Fleet
  • A large collection of cars used for any specific business.
  • Lemon Law
  • A law obligating manufacturers or sellers to repair, replace or refund the price of motor vehicles that prove to be defective.
  • What Our Customers Say

    Why buy this report?

    The Used Car Dealers market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Used Car Dealers:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • 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 Used Car Dealers 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
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Used Car Dealers, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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