London, March 23rd, 2012 - Respondents from the transport industry expect to see increased levels of consolidation, with 52% of respondents predicting at least some increase in M&A activity. Of respondents from the Asia-Pacific region, 56% expect an increase in M&A activity, followed by 52% in Europe and 49% in the Rest of the World.
It is expected that there will be increased levels of consolidation as expressed by executives from transport buyer companies. This could be a result of the need to manage new cost or demand pressures, increase market shares, develop new products, repay debt or adhere to new compliance procedures. Infrastructure activity and demand for services are expected to increase substantially as the global markets begin to recover. This is likely to lead to larger companies planning to acquire small, local companies with strong business models and growth opportunities to integrate their services – a senior executive from a technology service provider company in Asia-Pacific stated:
“With the development of global markets, we expect demand for services to increase which can best be met by acquiring local companies. The integration of local companies with larger, more experienced companies helps to provide world-class services.
Respondents have identified China, India Brazil and the Middle East as the most important emerging markets to offer growth. China in particular is expected to grow rapidly due to strong market potential, sufficient labor resources, expansion of its railroad infrastructure and sound corporate governance. Australia, Singapore, Taiwan, Hong Kong, and the US have been identified as developed regions with the most growth potential by rail and road buyer respondents, whilst ship buyer respondents prefer Singapore, Taiwan and Hong Kong, South Korea and Australia.
ICD Research’s industry survey revealed that, the average size of the global annual marketing budget for transport industry supplier respondents in 2010 was US$3 million. Although this had risen to US$4.6 million for 2011, 82% of supplier respondents plan to spend less than US$250,000 on marketing budgets with 8% of respondents planning to spend between US$1 million and US$10 million. Companies intend to keep budgets low.
‘Email and newsletters’, ‘conferences or events’ and ‘corporate or brand websites’ are expected to achieve the strongest investment gains. These new media channels have increased in importance among suppliers in the transport industry. With the rapid development of online social networking channels such as Twitter and Facebook, new opportunities are provided for respondents to effectively communicate messages between industry partners to build networks. However, ‘newspapers’, ‘radio’ and ‘telemarketing’ are expected to show the lowest investment gains, therefore less investment will be put into media channels such as these. The key areas of investment amongst marketing and sales solutions activities for the next year will be ‘Market intelligence research’, ‘business performance management solutions’ and ‘Customer Relationship Management (CRM) systems’.
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