Services Industry Overview

Automobile Rental And Leasing Market Characteristics

The automotive equipment rental and leasing industry includes companies involved in renting or leasing passenger cars and trucks without drivers and utility trailers. These establishments operate from a rent-like facility. Some automotive equipment rental and leasing companies offer short-term rental and long-term leases, while others provide both types of services.

The passenger car aftermarket consists of sales of passenger car aftermarket parts and services. Companies operating in the passenger car aftermarket (parts and services) provide manufacturing, remanufacturing, distribution, retailing, and installation of replacement vehicle parts, equipment, service repair, and automotive accessories. The market includes the sales of the tires, batteries, brakes parts, filters, lightings, and electronic components. The global passenger cars aftermarket market was valued at about $235.54 billion in 2018 and is expected to grow to $277.67 billion at a CAGR of 4.2% through 2022. North America was the largest region in the passenger car aftermarket (parts and services) market in 2018. The passenger car aftermarket (parts and services) market in Asia Pacific is forecasted to register the highest CAGR during 2018-2023. Increasing average lifespan of a car is one of the major drivers of the passenger car aftermarket as it leads to an increase in consumer’s regular maintenance and scheduled servicing of the vehicle. The lifespan of the car describes the maximum service life in terms of mileage and time. Changing of wheels, batteries, spark plugs, air filters plays a significant role in prolonging the life of a vehicle. According to IHS automotive survey, in 2017, the typical car on the road in the US is 11 years old. Addition to that, based on an article by USA Today, in 2015, the number of vehicles on the road that are at least 25 years old totaling up to 14 million increased from 8 million in 2002. Many companies are offering extended warranties to third parties on vehicle parts or services which in turn is hampering the growth of independent service providers. Extended warranties are given on a vehicle part/service to increase the lifetime of a vehicle which leads to free service or discounts towards the consumer. Since all warranty repairs are performed by the OEM (Original Equipment Manufacturers) only, the aftermarket sales and services market which is generated majorly from dealer service centers suffers a loss. According to Motor & Equipment Manufacturers Association (MEMA), in California for all light-duty vehicle extended warranties did not have an effect on independent repair shops from 2002 to 2005, however from 2008 (which concluded that all vehicles would have 100% PZEV (Partial Zero Emissions Vehicle) onward, the revenue of independent repair shops dropped at a rate of 7.7. The passenger car aftermarket is using 3D printing technology also called as Additive Manufacturing (AM) to make high-quality off-the-shelf car parts using 3D printers that are capable of printing in metals and alloys. 3D printing works by making a virtual 2D object in the software and constructing the 3D framework by using the printer. The use of 3D printing in producing automobile parts increases the efficiency and raises the production standards of the companies. Companies (original equipment manufacturers) such as General Motors, BMW, Ford and Porsche have already started investing in this trend. In 2018, General Motors announced its collaboration with Autodesk, a US-based multinational software corporation to produce lighter vehicle parts through 3D printing technique. The industry is regulated by several regulations governed by multiple international and country-specific agencies. One of the examples of such regulatory body is National Highway Traffic Safety Administration (NHTSA) of U.S. The Standard number 108 of section 571 under Title -49 "Transportation" mentioned in Code of Federal Regulations (CFR), states the requirements for original and replacement lamps, reflective devices, and associated lighting equipment for passenger cars as well as other multipurpose passenger vehicles. As defined in CFR, the purpose of section 571 is to set regulatory standards relating to lighting equipment in vehicles to be followed by motor vehicles including passenger cars. The standards also specify points where the equipment such as Headlamp should be mounted in vehicles so as to make it easily visible in public roads both in daylight and in darkness or other conditions of reduced visibility thus reducing traffic accidents and deaths and injuries. In 2018, Tenneco acquired Federal-Mogul for $5.4 Billion from Carl Icahn. The purchase included $800 million cash payment and 29.5 million shares of Tenneco, including non-voting stock. Federal-Mogul Corporation was established in 1899 and is headquarters in Southfield, Michigan, United States. It is a company which develops, manufactures and supplies products for automotive, commercial, aerospace, marine, rail, and off-road vehicles. Federal Mogul has a strong position in manufacturing and supplying of various auto parts all over the globe. The acquisition benefitted Tonneco with an increase in its auto parts portfolio in the global vehicle aftermarket. Through the acquisition, Tonneco plans to provide engineered solutions addressing fuel economy, power output and criteria pollution requirements for diesel, gasoline and electrified vehicles. Major players in the market are Denso Corporation, Robert Bosch Gmbh, Continental AG, 3M company and Delphi Automotive PLC.

Services Market Characteristics

The services market consists of the sales of services and related goods earned by entities (organizations, sole traders and partnerships) that provide services. A service can be defined as a transaction between a buyer and a seller without the transfer of any physical goods or commodities. It mainly involves the use of resources, experience, skill, ingenuity, and intelligence. Examples include equipment and machinery repairing, promoting or administering religious activities, grant making, advocacy, and providing dry-cleaning and laundry services, personal care services, death care services, pet care services, photofinishing services, temporary parking services, and dating services.

Civic Services Market Characteristics

The civic services market consists of the sales of civic services and related goods earned by entities (organizations, sole traders and partnerships) that organize and promote religious activities; support various causes through grant making; advocate various social and political causes; and promote and defend the interests of their members. A service can be defined as a transaction between a buyer and a seller without the transfer of any physical goods or commodities. Examples of civic service organizations include community associations or organizations, ethnic associations, fraternal associations or lodges, girl guiding organizations, history societies, parent-teacher associations, retirement associations, scouting organizations, and students' associations.

Real Estate Market Characteristics

The real estate industry’s market consists of the sales of real estate services by entities (organizations, sole traders and partnerships) that rent, lease and allow the use of buildings and/or land. The industry also includes managing real estate for others, selling, renting and buying real estate for others and appraising real estate.

Leasing Market Characteristics

The leasing and rental market consists of the revenues of entities (organizations, sole traders and partnerships) that provide the use of a wide array of tangible goods, such as automobiles, computers, consumer goods, and industrial machinery and equipment, to customers in return for a periodic rental or lease payment. The leasing industry includes establishments that rent consumer goods and equipment and establishments that lease machinery and equipment often used for business operations.

Commercial Services Market Characteristics

The commercial services market consists of the sales of commercial services by entities (organizations, sole traders and partnerships) that perform support activities for the day-to-day operations of other businesses or organizations. Examples include office facilities management services, travel arrangement services.

Personal Services Market Characteristics

The personal services market consists of the sales of personal services and related goods by entities (organizations, sole traders and partnerships) that provide personal and laundry services to individuals, households, and businesses. Services performed include: personal care services; death care services; laundry and dry-cleaning services; and a wide range of other personal services, such as pet care (except veterinary) services, photofinishing services, temporary parking services, and dating services.