Safety developments fetter repair industry growth

Report sees advances in truck and road design along with younger fleets as curbing sector's advance

January 25, 2013

Vehicle and road safety advances have combined to keep a tight rein on truck repair industry growth, a new report is expected to find.

A solid performance over the past five years has seen industry revenue estimated to have grown an annualised 2.2 percent to 2012-13 to reach $5.04 billion, market research firm IBISWorld, which is compiling the report, Truck Repair in Australia, states.

The industry benefited from road freight transport demand, which saw continued vehicle growth, along with the number of kilometres driven, leading to increased wear and tear.

However, this has been crimped by newer and safer vehicles and roads.

Recent increases in transport industry capital expenditure, resulting in younger fleets needing fewer repairs, mean "industry revenue is estimated to grow 1.6 percent in 2012-13", IBISWorld industry analyst Caroline Finch notes.

The report predicts similar conditions to prevail in the next five years.

Finch adds that while market share concentration is low as the industry is dominated by small enterprises and lacks major players, "there are signs of a consolidation trend within the industry".

The number of industry participants operating as sole traders or contractors has decreased, Finch argues.

This is reflected in the number of employees per enterprise, which has increased in the five years through 2012-13.

Another measure of consolidation, the number of establishments to enterprises, has also increased slightly.

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