COMMERCIAL VEHICLES MARKET ANALYSIS

The global commercial vehicles market size was valued at US$ 1071.68 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 18% from 2023 to 2030.  Increasing e-commerce demand and rising infrastructure developments are likely to boost the market for commercial vehicles over the forecast period.  The trend for destination weddings and occasions is boosting the penetration of rental vehicles, which is in turn fueling the commercial vehicle market. Furthermore, the growing need for residential and smart city projects, as well as bridges and flyovers, is driving the infrastructure sector and thus, the demand for heavy-duty commercial vehicles.

Global Commercial Vehicles Market: Regional Insights

North America to exhibit robust growth in the global commercial vehicles market over the forecast period, owing to presence of highly unified network of supply chain in the region connecting consumers and manufacturers through transportation modes such as air delivery services, freight rail, truck transport, and maritime transport. The number of population with increased purchasing power in the region is leading to growing investments in into infrastructure. Along with this the government focus on achieving in-house automotive production is also expected to drive the market growth in this region.

Moreover, Asia Pacific is likely to gain promising growth in the global commercial vehicles market over the forecast period. The region is showing major growth in warehousing facilities and transportation due to which the demand for unified logistics solutions is increasing in the region. As a result, the sales of commercial vehicles is on the rise. China being one of the biggest manufacturing hub with largest customer base is shifting to projects of larger infrastructure. Such factors are therefore is expected to fuel growth of the global commercial vehicles market across the region.

Figure 1: Global Commercial Vehicles Market Share (%), By Region, 2022

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Global Commercial Vehicles Market Drivers:

Rise in integration of safety features to boost the market growth

Due to growing road accidents, the demand for safety features in vehicles is increasing all over the world in order for preventing road accidents. For instance, as per the World Health Organization (WHO), road accidents cause nearly 1.24 million deaths of people and severe injuries in nearly 20 to 50 people every year. Due to this, manufacturers are increasingly integrating safety features in to vehicles. With integration of advanced safety technologies, the demand for commercial vehicles is rising all over the world. Thus, this factor is expected to fuel growth of the global commercial vehicles market over the forecast period.

Increasing growth of retail e-commerce industry to drive the market growth

Growth of retail e-commerce industry is leading to increasing sales of commercial vehicles. In recent years this industry has shown significant growth with enhanced living standard among people with middle-scale income, introduction of various e-commerce portals, and rollout of internet services all over the world. Due to this, purchasing goods has become easy for customers. With adoption of new approaches and novel business models based on the newest technology, the retail e-commerce industry is witnessing strong growth. As a result, the demand for commercial vehicles is increasing in this industry, which is further expected to propel growth of the global commercial vehicles market over the forecast period.

Global Commercial Vehicles Market Opportunities:

Emergence of autonomous commercial vehicles to produce multiple growth opportunities in the global commercial vehicles market over the forecast period. These vehicles make use of combination of GPS, cameras, RADAR, and onboard computer for traveling to destinations without requiring human assistance. In order for these vehicles to be completely autonomous, they require ability of navigating with no or minimal human intervention to an already decided destination over roads with no modification for use of such vehicles. The demand for these vehicles is increasing rapidly, which in turn is creating growth opportunities in the market.

Rise in growth of production as well as sales of electric commercial vehicles is projected to offer lucrative opportunities in the global commercial vehicles market over the forecast period. The growing number of logistics, freight, and construction activities are driving the electric vehicle market. As government of several companies are imposing stringent emission norms, the demand for electric commercial vehicles is increasing, further driving their production and sales. These vehicles offer significant environmental benefits. Thus, the global commercial vehicles market is likely to witness growth opportunities in the coming future.

Global Commercial Vehicles Market Trends:

Increasing use of advanced systems and technologies in cargo vehicles is a major trend

Cloud computing is increasingly being used in the automobile industry, as it plays an important role in production of freight vehicles and the services of this technology range from operating to designing management of different systems. Using cloud computing can offer reduced costs, further minimized and reduced waste. Due to this technology, communication between vehicles from remote locations becomes possible along with retrieving and storing data. Thus, due to various benefits of such advanced technologies, the global commercial vehicle market is witnessing trend of advanced systems and technologies in cargo vehicles.

Adoption of organic growth strategies by market players is trending in the market

Organic growth has always been a key strategy for market players. Major market players are investing in expansion of their product portfolio through developments and introduction of innovative products. For instance, in August 2022, Mahindra and Mahindra announced the launch of the novel Jeeto Plus CNG, CharSau. The novel vehicle is leading commercial vehicles in terms of mileage, range, payload, and maneuverability. It also offers higher profits for intra- and inter-city applications. Thus, with launch of such commercial vehicles, the trend is likely to boost the market growth in the near future.

Global Commercial Vehicles Market Restraints:

Environmental impact of emissions to hinder the market pace

Due to emerging concerns around climate change and vehicles are one of the leading reasons behind air pollution due to emissions of hydrocarbons, carbon monoxide, and nitrogen oxide among other factors. Diesel engines emit nitrogen oxide that is one of the leading cause of death among people due to air pollution. Along with this, heavy and light duty commercial vehicles cause higher emission of nitrogen oxide, which further severely impacts the environment. Thus, this factor is expected to hinder growth of the global commercial vehicles market over the forecast period.

Stringent government regulations around emissions to hamper the market growth

Government of countries around the world are drafting stringent regulations for limiting the emissions caused due to vehicles. For instance, the European Union imposed stringent emission norms such as Euro 6/VI standard for controlling emissions from vehicles and improve the procedures of testing the fuel consumption as well as pollutant emissions of light duty vehicles. Such regulations are in turn likely to impact adoption of commercial vehicles, which is anticipated to impede growth of the global commercial vehicles market over the forecast period.

Figure 2: Global Commercial Vehicles Market Share (%), By Product Segment, 2022

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Global Commercial Vehicles Market Segmentation:

The global commercial vehicles market report is segmented into Product and End Use.

Based on Product, the market is segmented into Light commercial vehicles, Heavy trucks, and Buses & coaches. Out of which, Light Commercial Vehicles is expected to dominate the global market over the forecast period and this is attributed to the due to various benefits of the light commercial vehicles such as cost-effectiveness. These vehicles are used in transportation of passengers and goods. With the rise in demand of light commercial vehicles across several end-use industries such as tourism, mining and construction, and logistics, the segment is likely to gain substantial growth in the coming future.

Buses & Coaches segment is also expected to witness significant growth in the near future and this is owing to the rise in investments from governments around the world in public transportation, specifically eco-friendly buses and coaches to reduce air pollution and traffic congestion. This factor is influencing the demand for buses and coaches as commercial vehicles.

Based on End-Use, the market is segmented into Industrial, Mining & construction, Logistics, Passenger transportation, and Others. Out of which, Logistics is expected to dominate the global market over the forecast period and this is attributed to the rising growth of manufacturing and retail industries in developed as well as emerging countries around the world. Due to this, logistics and warehouse facilities become accessible for cities and towns. This in turn is driving the demand for commercial vehicles in the logistics segment.

Passenger Transportation segment is also expected to witness significant growth in the near future and this is owing to the increase in affordability as well as affinity for leisure travel along with growing government initiatives toward free education. These factors are driving the demand for commercial vehicles in passenger transportation.

Global Commercial Vehicles Market: Key Developments

In June 2022, Ashok Leyland introduced the ecomet STAR 1115 CNG truck, with 360-480 liters of CNG cylinder capacity. The new vehicle offers one of the best single-fill range.

In June 2022, Ford announced plans to open a manufacturing unit in Ohio specially for the electric commercial vehicles of the company. It also revealed its plan of investing US$ 3.7 billion, which will add more than 6,200 new jobs at its manufacturing jobs at its plants in Missouri, Michigan, and Ohio.

In September 2021, Toyota Motor Corporation acquired Renovo Motors, a U.S. company based in the Silicon Valley involved in development of automotive operating systems.

In August 2022, Mahindra & Mahindra Ltd. Expanded its cooperation with Volkswagen Group. The companies made an agreement of supplying MEB electric components to novel electric platform of Mahindra called INGLO. This deal will be strengthen the partnering agreement of both companies from this year.

Global Commercial Vehicles Market: Key Companies Insights

The global commercial vehicles market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global commercial vehicles market are Ashok Leyland, General Motors Company, Bosch Rexroth AG, Xiamen Golden Dragon Bus Co., Ltd., Daimler AG, Volvo Group, Volkswagen AG, Mahindra and Mahindra Ltd., Toyota Motor Corporation, and Tata Motors Ltd.

*Definition: Commercial vehicles are motorized vehicles used to transport goods and passengers. Pickup trucks, box trucks, semi-trucks, vans, buses, taxicabs, and trailers are some of the commercial vehicles in use worldwide.