Commercial Vehicle Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028
The global commercial vehicle market was valued at USD 1.26 trillion in 2020. It is expected to grow at a compound annual rate (CAGR of 5.2%) between 2021 and 2028. Due to the COVID-19 pandemic that afflicted the automotive industry, the market saw a decrease in growth due to low sales and new requirements. The growth is expected to be fueled by the implementation of vehicle scrappage programs, aggressive investments in infrastructure and rural development, and the drafting of strict regulatory norms regarding vehicle length and loading limits. Growth is also expected to be driven by the resumption in some areas of the world of mining activities, which has led to a demand for tippers. Market growth is also expected to be aided by the increasing disposable income of both developed and developing countries, and continued infrastructure development.
Many governments around the world have adopted various policies and created regulations to ensure efficient management of cargo being transported by commercial vehicles. The Federal Motor Carrier Safety Administration (FMCSA), in the United States, is responsible for preventing injuries and fatalities related to commercial vehicles. The FMCSA has created a regulation governing the dimensions of goods that can be carried in a vehicle. These regulations will likely drive market growth in the future by increasing demand for commercial vehicles that can transport goods.
Many Original Equipment Manufacturers (OEMs), realizing the potential of connectivity to revolutionize logistics and transportation, have launched commercial vehicles with connectivity features such as traffic data, weather reports, accident warnings, and updates on roadworks. The many benefits of connected vehicles include enhanced safety, preventive maintenance, vehicle abuse prevention, and a reduced risk of theft. Market growth is expected to be driven by increasing demand for connected commercial vehicles over the forecast period.
The market’s growth is also expected to be helped by the advancements in electric and semi-autonomous commercial vehicle development. Because of the many benefits that EVs offer over ICE vehicles, Electric Vehicles will be gradually adopted for commercial transport. Market growth is expected to be driven by favorable policies that encourage EV adoption, especially in developed countries.
The global economic impact of the COVID-19 pandemic was severe. It adversely affected many industries and verticals, including the automotive sector. The restrictions in place around the globe to stop the spread of the disease led to the suspension of production at many manufacturing plants. This caused severe disruptions in the supply chain. This isn’t the only problem in the automotive industry. The demand for automobiles and commercial vehicles has dropped significantly.
In the past, Europe was the leader in commercial vehicle sales. The decline in automotive sales has seen the European market adopt fewer commercial vehicles. Europe is now poised to experience mixed recovery cycles due to the restrictions in certain parts of the region as well as the economic stimulus packages announced by the governments of the region. The Organisation Internationale des Constructeursd’Automobiles (OICA) reports that 2.5 million commercial vehicles were registered in Europe for 2020. This is 14.9% less than the 2.9 million units registered in 2019. In 2020, the U.S. sales of commercial vehicles also fell by 10.3%.
In 2020, the Light Commercial Vehicles segment was responsible for 75% of all revenue. LCVs can be used to transport goods and passengers at a very affordable cost. LCVs have many tax advantages and help reduce emissions. These vehicles can also be modified to transport goods or passengers. These vehicles are also very cost-effective, which will be a boon for the segment’s growth.
From 2021 to 2028, the buses and coaches market is expected to grow at a CAGR exceeding 4%. This segment’s growth can be attributed largely to the increased use of coaches and buses in the tourism and healthcare industries. The most economical mode of transportation, buses, and coaches, drives their sales. It is encouraging to see the bus and coach segment grow due to the growing use of electric buses in developing and developed countries.
In 2020, the logistics segment held 25% of the total market. The growth of global trade and the strengthening of the logistic infrastructure are two of the key factors expected to drive the segment’s growth over the forecast period. The steady growth of the eCommerce industry is also a positive sign for the growth and development of the logistics segment.
From 2021 to 2028, the passenger transport segment will experience a CAGR of more than 5%. Commercial vehicles will be in demand due to the increase in public transport use. People find public transportation more efficient than driving to work. Both the accessibility and affordability for passenger transport and the rising cost of owning a vehicle in both developed and developing countries are key factors driving the growth of the passenger transportation market.
North America was the market’s largest contributor to the total revenue in 2020. It is expected to lead the way over the forecast period, with a CAGR of more than 4%. North America’s highly integrated supply chain network connects consumers and manufacturers through multiple transport modes. This includes freight rail, air, and express delivery services, maritime transport, and truck transport. The market is growing because of this. The region’s growth is expected to be aided by the availability of financing options that are convenient, the strong focus of the governments to ensure domestic production, and aggressive investments in infrastructure.
Due to the increasing demand for transport, warehousing, and unified logistic solutions, the Asia Pacific region market will experience significant growth in the coming years. Strengthening of road infrastructure, the easy availability of cost-effective labor, raw materials, as well as the growing number of manufacturing facilities opening up in developing countries like China and India are all factors expected to drive the region’s growth.
In 2020, the major players in the global market were Tata Motors (Tata Motors), Volkswagen AG, Ashok Leyland, and General Motors. As part of their efforts to improve their product offerings, most vendors place a strong emphasis on providing innovative products that are based on the most recent technologies. To cement their market position, the companies are also taking strategic initiatives such as regional expansion, strategic mergers, partnerships, and collaborations.
For most market players, organic growth is still the main strategy. Market players are now focusing on expanding product lines by launching innovative products and developing new products. Volvo Trucks, for example, announced in March 2021 that production of the new generation heavy-duty trucks, the Volvo FH, FH16, and FH16 models, was now underway. The company’s production plants in Russia, Belgium, and Sweden will manufacture the new-generation heavy-duty trucks. The following are some of the major players in the global market for commercial vehicles:
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