Commercial Vehicle Market size is likely to witness substantial growth over 2021-2027. This growth is driven by the extensive development of road infrastructure networks in countries like India, to facilitate seamless transportation and travel. Also, the rapid growth of e-Commerce and the subsequent expansion of the logistics sector will further amplify the commercial cars demand.
A commercial vehicle refers to a type of motor vehicle used to transport goods or passengers. This motor vehicle has a gross vehicle weight rating or a gross combination weight of over 26,001 pounds, including a towed unit with 10,000 pounds gross vehicle weight rating.
Escalating wholesales on the back of advancements in mining activities, irrigation projects, and infrastructural developments are the key trends augmenting the commercial vehicle market growth. Moreover, the introduction of scrappage policies of vehicles that do not meet the fitness or emission criterion will also contribute to the market expansion in the years ahead. For example, a new vehicle scrappage scheme implemented in India is expected to boost the sales of medium and heavy commercial vehicles, which have been kept in the contraction zone since 2018.
On the basis of product, commercial vehicle industry from the light commercial vehicle segment is expected to garner significant revenue by 2027. This is attributable to the increasing penetration of more localized distribution in the logistics sector and high restrictions on the use of large-capacity trucks. The segmental growth will further be stimulated by its myriad usage benefits, like emergency braking assistance, GPS navigation, speed control, and automatic transmission, among others.
Regionally, Europe is poised to emerge as a lucrative revenue prospect for the commercial vehicle market by 2027. This can be credited to the rapid industrialization, rising electrification, and surge in demand for electric commercial vehicles in the region. For example, Norway set new goals for vehicle electrification to ensure that 100% of new heavy-duty commercial vehicles produce zero emissions by 2030.
Prominent players functioning in the commercial vehicle industry include Renault Trucks (AB Volvo), Daimler AG, Mercedes-Benz (Daimler), Isuzu Motors, Dongfeng Motor (state-owned Assets Supervision and Administration Commission), Volkswagen AG (Porsche SE), Volvo Cars, General Motors, Mahindra & Mahindra, Ashok Leyland (Hinduja Group), and Tata Motors, among others. Innovative product launches and mergers and acquisitions are among the strategies being employed by these industry participants to reinforce their positions and expand their businesses across the global market.
For instance, in March 2021, Tata Motors unveiled the Ultra Sleek T-Series range of intermediate and light commercial trucks. This new vehicle series was designed for urban transportation and to meet ever-increasing e-commerce demand in India.
In September 2020, Ashok Leyland launched a new light commercial vehicle range, Bada Dost, with enhanced features, with an aim to offer high driver comfort and to address the domestic LCV market.
Due to the implementation of lockdown and the daily upsurge in the COVID-19 cases, several types of commercial vehicles carrying non-essential goods were stranded on the highways in nations like India. Strict lockdown and movement restrictions implemented during the pandemic resulted in plummeting sales of these vehicles across various countries, creating challenges for the commercial vehicle industry outlook.
With lockdown and isolation protocols triggering the advent of the new normal, consumers and businesses are increasingly going digital, thus resulting in more product purchases through online sales channels. e-Commerce’s share of the global retail trade rose from 14% in 2019 to 17% in 2020. The growth of the online sector has benefitted the logistics sector, owing to the significant increase in goods and services delivery, which could aid commercial vehicle market recovery over the foreseeable future.