Commercial Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Light Commercial Vehicle, Heavy Vehicle, and Buses), By Fuel Type (I.C. Engine, EV), and Regional Forecast, 2022-2029

The global commercial vehicle market size was USD 821.28 billion in 2021 and is projected to grow from USD 955.57 billion in 2022 to USD 1,712.44 billion in 2029, growing at a CAGR of 8.7% during the 2022-2029 forecast period. Based on our analysis, the global market exhibited a decline of 10.2% in 2020 as compared to 2019. The COVID-19 pandemic has been unprecedented and staggering, with commercial vehicle experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels.

Commercial vehicles are four-wheeled vehicles that are used to transport products. The difference in weight between light vehicles and large trucks is measured in tonnes (metric tonnes). This limit varies between 3.5 and 7 tonnes depending on national and professional standards. Buses and coaches are used to transport passengers with more than eight seats in addition to the driver's seat and a maximum mass greater than that of light vehicles (range from 3.5 to 7 tonnes).

The market is fragmented into light vehicles, heavy vehicles, and buses. A Light Commercial Vehicle (LCV) can be described as a commercial carrier vehicle with the vehicle weight not exceeding 3.5 metric tons. A truck designed to transport cargo and carry specialized payloads is categorized as a heavy commercial vehicle. A bus is a public transport road vehicle designed to carry significantly more passengers than the average car or van. Various governments are taking initiatives to develop and utilize freight vehicles on the road. Technical improvements in the freight vehicle field are constantly evolving, and some of these technologies quickly become mandatory requirements. For instance, the European Union has regulated automakers to install Advanced Driver Assistance Systems (ADAS), AEB, and Lane Departure Warning (LDW) in all heavy vehicles weighing nearly 15,400 pounds.

COVID-19 IMPACT

Dropped Sales of Commercial Vehicles Restricted Growth Amid COVID-19

The global outbreak of COVID-19 had a severe impact on the supply chain and logistics industry, as it was stalled due to the rapid spread of COVID-19 in the world. To avoid the spread of COVID-19, governments worldwide have adopted strict social distancing policies, partial to total lockdown interventions. Lockdown measures caused production and demand disruptions to automobile manufacturers and their sub-contractors. Furthermore, restrictions were lifted across different sectors and countries at a different pace, which resulted in input shortages in the automobile sector’s complex value chains.

According to the International Organization of Motor Vehicle Manufacturers (OICA), in 2020, global automotive production declined by 16% globally to less than 78 million vehicles, equivalent to sales levels in 2010. Europe, which accounted for almost 22% share of the total production, witnessed a decline in production of around 21%. All the key producing countries in the region witnessed a decline in production ranging from 11% to 40%. Similarly, production decreased by 19% in the U.S. and more than 30% in South America, with a decline of nearly 32% in Brazil.

The decline in Asia Pacific (only 10%) was considerably lesser than in other regions. In particular, the Chinese production declined by only 2% as it recovered quickly despite the exponential production loss in Q2 2020.

Furthermore, the semiconductor shortage caused delays to the overall automobile market. For instance, Ford was compelled to decrease the production of its F-150 truck in Q2 2020, which accounts for a significant portion of its profits. Similarly, General Motors temporarily stopped production in March, and Toyota announced its plan to cut annual production by 40% in 2021 due to the semiconductor shortage. These factors have directly contributed to a severe loss of revenue for cargo vehicle manufacturers in 2020.

Several governments have introduced long-term plans to reduce the dependency on a small number of semiconductor chip manufacturers in Asia Pacific. For instance, Europe introduced the European Chips Act, and the U.S. government passed the CHIPS act in 2021 to boost the domestic production of chips.

LATEST TRENDS

Growing Usage of Advanced Technologies and Systems in Cargo Vehicles to Drive Market Growth

The use of cloud computing in the vehicle industry is growing rapidly. Cloud computing plays a vital role in freight vehicle production, and its services range from operation to design to management of various systems. The functions of cloud computing can reduce costs, thereby minimizing and reducing waste. Cloud computing makes it possible to communicate with vehicles from remote locations and retrieve and store data. Telematics is also a valuable technology for recording and evaluating operational data from vehicles. Many companies are rapidly adopting telematics in their commercial fleets. For instance, in 2020, Europcar strengthened its partnership with Geotab and Telefónica as part of its “Connect” roadmap to connect its entire fleet by 2023.

DRIVING FACTORS 

Electrification and Adoption of Advanced Technologies to Boost the Market Growth

Globally, the rising air pollution caused by the fuel emitted by conventional vehicles leads to environmental crises. This has encouraged manufacturing companies to shift toward sustainable sources of energy. The public transportation systems of various regions are adopting electrification in freight vehicles to promote zero-emission public transport while keeping the environment clean and breathable for residents.

Governments have imposed stringent regulations to curb the rising emission level and taken various initiatives to promote the electrification of vehicles. The logistics sector is also focusing on electric vehicles by developing the infrastructures for the same. The OEMs are also working toward reducing the cost of batteries to encourage the use of electric vehicles across the globe. Various prominent players, such as Toyota, Daimler, and Volvo, are shifting toward electric vehicles to meet the rising demand. Moreover, electric vehicles are also gaining popularity in the global market, owing to their various properties such as high battery life, increased range, energy efficiency, and advancement in electronic systems. Moreover, freight vehicles are observing a trend of automation, which is driving the market.

Adopting Advanced Driving Assistance System (ADAS), such as lane departure warning systems, driver drowsiness detection systems, driver monitoring systems, and blind spot detection systems, boosts the market. Furthermore, connectivity and telematics are transforming operations to a large extent, encouraging the manufacturers to equip vehicles with several connected services as they provide enhanced safety and prevent unauthorized access to vehicles, thereby avoiding mishandling and wear & tear of freight vehicles. This is anticipated to help boost market growth over the next few years. For instance, Valeo and Wabco signed a Memorandum of Understanding (MoU) to jointly work toward developing ADAS technologies in freight vehicles. The association is working on a radar solution to deliver blind-spot warning assistance to drivers, thus complying with the German regulations.

Development in Infrastructure and Industrialization to Drive the Market Growth

The rapid growth in population and urbanization, developing infrastructures, and expansion in the industrial sector are the prime reasons for the growth of freight vehicle sales worldwide. The industrial sector is expanding, especially in the developing economies, giving rise to jobs in various sectors such as construction, mining, and tourism. The availability of jobs has increased the number of commuters, thereby creating high demand for public transport.

Digital transformation and e-commerce also play a vital role in boosting the transportation and logistics sector. Increasing industrialization is boosting the development of infrastructures. Moreover, governments are investing a high percentage in developing road infrastructures to promote regions' transportation and logistics sectors.

The tourism industry is also increasing, owing to the development in the transportation system and good roads and connectivity. The trend of destination weddings and occasions has fueled the demand for rental vehicles for the past few years. Urbanization has given a boost to the mining and construction industries. New residential projects, smart city initiatives, and the rising need for flyovers and bridges create high demand for technologically advanced freight vehicles.

The Government of India, in the 2020-21 Union Budget, allocated USD 24.27 billion to the infrastructure sector, mainly highways, renewable energy, and transportation. Japan and India have announced their association to develop infrastructure for India’s north-eastern states and set up an India-Japan Coordination Forum for the development of north-eastern infrastructure projects.

RESTRAINING FACTORS 

Complexity in Operating Advanced Systems and High Cost of Investment May Restrain the Market Growth

As the automobile industry is shifting toward electrification and adopting advanced technology in vehicles, the high cost incurred during production and the complex mechanism in advanced systems will likely hamper the market growth. The manufacturing companies invest a high percentage of research in developing new technologies in freight trucks. The high cost of lithium-ion batteries used in vehicles, installation of software, and high capital investment ultimately increase the vehicles' manufacturing cost.

Advanced driver assistance systems, such as the adaptive cruise control, driver monitoring, park assist, driver drowsiness detection, blind spot detection, and automated emergency braking, consist of sensors, cameras, radars, mapping, and other software systems. These highly technological systems bring many technical challenges and complications with them. As these systems operate on batteries, the constant consumption of battery power may lead to battery disturbances as well as relying on these systems may add a calculated risk of malfunctioning and failures. Also, the electronic components in these systems may malfunction and project incorrect information. Moreover, the high risk of cyber security threats and the complexity faced by the driver in operating the system may cause hazards to the vehicles and the passengers and driver. Any malfunctions or forced and unforced errors in these advanced systems may be dangerous and life-threatening for the users.

Thus, the complex mechanism, high replacement and maintenance costs of these systems, and lack of skilled laborers are likely to restrain the global commercial vehicle market growth.

SEGMENTATION 

By Vehicle Type Analysis

Light Commercial Vehicle Segment to Hold the Largest Market Share

Based on vehicle type, the market is segmented into light commercial vehicle, heavy vehicle, and buses. The light commercial vehicle segment accounts for a significant share in the global market, owing to its highest usage in logistics operation in a smaller range. It is expected to continue to account for most of the global market. The heavy vehicle segment is also expected to develop exponentially over the forecast period. It is expected to exhibit the highest CAGR (11.8%) during the forecast period. The bus market is also expected to grow exponentially during the forecast period. It is anticipated to exhibit the second-highest CAGR. The rising urban population & their needs and the increasing infrastructure web in developing Asian countries, such as India and China, contribute to the global market growth.

By Fuel Type Analysis

EV Segment is Anticipated to be the Fastest-Growing Segment Owing to Rising Sale of Electric Mobility in all Vehicle Types

In terms of fuel type, the market is divided into I.C. engine and Electric Vehicle (EV). The I.C. engine segment has the highest commercial vehicle market share in the global market. However, the EV segment is predicted to experience promising growth due to the rise in demand, owing to stringent regulations regarding fuel economy standards. Additionally, to increase EV sales, manufacturers are continuously focusing on reducing the price of the battery, propelling the global market growth. Compared to conventional I.C. engines, Commercial EVs produce no noise and air pollution and have a greater driving range. They are also more compatible with autonomous driving. Hence, the EV segment is expected to exhibit the highest CAGR during the forecast period.

REGIONAL INSIGHTS

The market size in North America stood at USD 485.31 billion in 2021. North America holds the largest position in the market, owing to the growing demand for freight vehicles in North America. This is evident attributed to the fact that according to OICA, North America witnessed a decline of 20.3% in freight vehicle production due to the COVID-19 pandemic. However, there was a surge in new orders as soon as lockdowns were lifted. Also, there was increasing demand for long-distance operations from fleet management in this region. It is estimated that the region will exhibit good growth in the global market. As the demand for personnel and cargo transportation continues to increase, it is expected that this demand will significantly increase in the future.

The Asia Pacific market stood at USD 207.67 billion in 2021 and is projected to reach USD 433.69 billion by 2029 at a CAGR of 8.9% over the forecast period. The region is likely to dominate the global market as the second-largest automotive hub, owing to increasing vehicle production per year in the region's countries. The growing adoption of vital governmental initiatives, the use of electric vehicles, and autonomous vehicles are likely to promote the development of the market in the region during the forecast period. Countries, such as India and China, heavily invest in infrastructure and the startup ecosystem. This is a boosting factor for the growth of the market in this region. Furthermore, the growth of businesses, such as mining and logistics, in developing countries in this region will propel the development of the market.

Europe holds the third position in the global market. The region is expected to grow with a constant CAGR. The switching of fleet operators from fossil fuel-powered trucks to EV-powered vehicles can help propel the growth of the market. According to a survey, in 2018, about 40% of the fleet operators said they would want to include electric or hybrid trucks in their new purchases. In 2021, that number jumped to around 60%, with the fleet operators expecting their fleets to have almost 50% of electric trucks by 2025. By 2030, buyers expect electric freight vehicles to edge out fossil fuel trucks with a 60% market share. Hence, these factors will help propel the growth of the global market.

In the market, the rest of the world contributes very little compared to other regions, and this is due to fewer automotive OEMs, low adoption of technology, and less presence of all types of vehicles. However, it is expected to grow in the future at a CAGR of 8.6%.

KEY INDUSTRY PLAYERS

Daimler AG is a Top Player in the Market Owing to Strong Geographical Presence and Wide Product Portfolio

Daimler Truck is one of the biggest producers of freight vehicles and the world's biggest manufacturer of premium cars with a footprint across the globe. With more than 40 production facilities worldwide and more than 100,000 staff, the company is one of the major cargo vehicle manufacturers with a global reach. Daimler Truck encompasses seven brands, BharatBenz, Freightliner, Western Star, Mercedes-Benz, Fuso, Setra, and Thomas Built Buses. North America Daimler Trucks's brands include Freightliner and Western Star. Moreover, Daimler Truck has Mercedes-Benz Vans & Cars, Daimler Buses & Trucks, and mobility divisions. The company has headquarters in Germany, Europe, with more than 300,000 employees across the globe.

LIST OF KEY COMPANIES PROFILED:

• Daimler AG (Germany)


• PACCAR Inc. (U.S.)


• Hino (Japan)


• Scania (Sweden)


• Tata Motors (India)


• Navistar International Corp (U.S.)


• BYD Auto Co., Ltd. (China)


• AB Volvo (Sweden)


• Toyota Motor Corporation (Japan)

KEY INDUSTRY DEVELOPMENTS:

• June 2022- Ashok Leyland announced the launch of the ecomet STAR 1115 CNG truck. Furthermore, the truck's CNG cylinder capacity spans from 360 to 480 liters and provides the greatest single-fill range.


• June 2022: Volvo’s commercial trucking division announced the testing of its hydrogen fuel cell powered trucks. The fuel cells are provided by CellCentric (a JV of Volvo and Daimler Trucks). Volvo claims its trucks can be refueled in under 15 minutes and provide a driving range of 1,000 kilometers.


• June 2022: Ford announced a manufacturing facility in Ohio exclusive for its electric commercial vehicle segment. Ford also announced its plans to invest USD 3.7 billion adding more than 6,200 new manufacturing jobs at its plants in Ohio, Michigan, and Missouri.


• December 2021 – Viaduct partnered with Paccar to ingest and interpret connected data. The collaboration will integrate Paccar’s telematics, diagnostics, and repair data pipelines with Viaduct’s connected vehicle data and analytics platform.


• March 2020- Hino Indonesia (HMMI) announced the achievement of production of a total of 500,000 vehicles at a cargo vehicle event held in Jakarta. This set a milestone in the company’s production history.

REPORT COVERAGE

The global commercial vehicle market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, vehicle types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the market's growth.

Report Scope & Segmentation