Commercial Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Light Commercial Vehicle, Heavy Commercial Vehicle, and Buses & Coaches), By Power Source (Gasoline, Diesel, HEV / PHEV, Battery Electric Vehicle (BEV), Fuel Cell Vehicle) and Regional Forecast, 2020-2027

The global commercial vehicle market size was USD 748.6 billion in 2019 and is projected to reach USD 621.1 billion by 2027, exhibiting a CAGR of -2.3% during the forecast period.

The commercial vehicle industry is entering a new era. Although profits and revenues are still being primarily derived from diesel vehicles, new technologies are drastically affecting investments by original equipment manufacturers (OEMs) and companies’ product development strategies. challenges for commercial vehicle OEMs seeking a leading position in the market are becoming more difficult owing to new technologies such as autonomous driving and alternative powertrains. However, OEMs are balancing their position by laying the foundations for these technologies and also by maintaining existing business profitability.

Some of the major countries/regions are implementing stringent rules for the safety of drivers as well as pedestrians by the installation of safety features in vehicles. For example, the European Union has mandated automakers to install Advanced Driver Assistance Systems (ADAS), Auto Emergency Braking (AEB), and Lane Departure Warning (LDW) in all heavy vehicles weighing nearly 15,400 pounds.

Decrease in Product Sales to Slow Down Market Growth amid COVID-19 Pandemic

The COVID-19 pandemic triggered an unprecedented decline in vehicle sales in early 2020, severely impacting the automotive industry. To curb the spread of the coronavirus, transportation and manufacturing operations have been stopped. Further, to ensure social distancing practices, lockdowns and the adoption of proper safety measures in manufacturing plants have been implemented. As a result, activities across automotive industries around the globe have slowed down and the public shuttle services to get off work have also been disturbed. Thus, as a consequence of the adverse impacts of the coronavirus on the commercial vehicle industry, product demand and sales are expected to drop drastically.

According to organizations in Europe such as the European Association of Automotive Suppliers (CLEPA), the European Automobile Manufacturers Association (ACEA), and among 21 national associations, including the German Association of the Automotive Industry (VDA) and the Society of Motor Manufacturers and Traders (SMMT), stated that around USD 100 billion of production has been lost owing to the Covid-19 outbreak.

The hesitancy among people regarding the use of public transport during the pandemic will also have a negative impact on this market.  

LATEST TRENDS

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Growing Usage of Cloud-based Systems in the Automotive Industry to Drive the Market

The use of cloud computing in the CV industry has risen dramatically, owing to several properties that have enhanced the performance of these vehicles. Cloud computing plays an important role in vehicle production and its services range right from the operation stage and design to management. Functions such as the remote location of vehicles and storing and retrieving this data that come with cloud computing can reduce costs, thereby minimizing and reducing waste. Cloud computing allows seamless communication with these vehicles from remote locations and helps retrieve and store data.

DRIVING FACTORS

Rapid Industrialization and Advances in Infrastructure to Propel Market Growth

The primary factors fueling the commercial vehicles market growth rate include rapid population growth, accelerated urbanization, expansion of industries, and advancements in infrastructures such as smart cities. Recent advances in the industrial sector, especially in developing economies, have increased employment in sectors such as construction, mining, supply chain, medium and heavy-duty and tourism. Therefore, the increase in job opportunities will lead to an increase in the number of commuters, which in turn, will have a high impact on public transportation demand. This has led to an increase in the number of buses or electric buses and coaches on the road, simultaneously leading to an increase in the demand for CVs.

Adoption of Advanced Technologies and Electrification to Boost Market Growth

The increasing adoption of advanced driver assistance systems (ADAS) such as driver sleepiness detection systems, lane departure warning systems, driver monitoring systems, blind spot detection systems, and others is driving the growth of the CV market. In addition to this,  the fact that connectivity and telematics are dramatically changing the way operations are performed has encouraged manufacturers to provide multiple connectivity services for vehicles. This is attributable to their ability to enhance security and prevent unauthorized vehicle entry, thereby avoiding human errors in these vehicles. This is expected to help promote market growth in the next few years. For instance, Valeo and Wabco signed a Memorandum of Understanding (MoU) to work together on ADAS technology for developers' vehicles. The association is studying radar solutions to provide drivers with blind-spot warning assistance in order to comply with German regulations.

RESTRAINING FACTORS

Strict Government Regulations and High Costs to Inhibit Market Growth

Governments in several countries across the world are taking measures to develop their domestic automotive industry, whilst maintaining the safety of passengers and pedestrians. For example, the European Union (EU) has implemented strict regulations to reduce the incidence of road traffic accidents, ensure the safety of passengers and drivers, and curb rising fuel emissions. It has also imposed strict laws on auto manufacturing companies to control exhaust emissions.

Governments of some economies have formulated emission policies, such as India’s BSVI emission standard, Europe’s European VI, and China’s China VI, with the goal of reducing emission levels by setting emission limits. However, governmental mandates to install a catalytic converter in gasoline- or diesel-powered vehicles in some countries and also the emphasis on the downsizing of engines are some aspects leading to a rise in the cost of vehicles. All these measures taken by governments and the various laws imposed by regulatory authorities on the automotive industry have forced manufacturers to comply, increasing manufacturing costs in the process and resulting in high purchase costs for these products.

SEGMENTATION

By Vehicle Type Analysis

Light Commercial Vehicle Segment to Hold the Largest Market Share

Based on vehicle type, the market is segmented into LCV, HCV, and buses & coaches. The light commercial vehicles segment accounts for the major share in the global market owing to their widespread usage in small-range logistics operations.

The HCV segment is expected to show exponential growth in the market over the forecast period owing to the rising demand for mining and long-hauling operations.

By Power Source Analysis

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Diesel Segment to Dominate Market Share

Based on the power source level, the market is segmented into gasoline, diesel, HEV / PHEV, battery electric vehicle (BEV), and fuel cell vehicle. The diesel segment holds the largest share in the global market owing to its higher power output. However, the gasoline segment is also expected to experience considerable growth in the coming years. The HEV / PHEV segment is also likely to experience considerable growth in the market owing to the rising demand for this power source. The battery-electric vehicle segment is also likely to experience substantial growth in the market owing to the subsidies and incentives given by governments for the purchase of EVs.

REGIONAL INSIGHTS

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The market in North America was worth USD 332.9 billion in 2019. The region is expected to hold a dominant position in the commercial vehicle market share over the forecast period. The growing demand for these vehicles in North America is a consequence of the increasing demand for long-distance operations and efficient fleet management in this region.

It is expected that Europe will show substantial growth in the market. The demand for personnel and cargo transportation is expected to continue to increase in the foreseeable future.

The Asia-Pacific region is expected to grow exponentially in the coming years. Due to the growth of businesses such as mining and logistics in developing countries, the production of light and heavy vehicles in this region is increasing.

KEY INDUSTRY PLAYERS

Daimler AG to Dictate the Global Market Dynamics

Daimler AG is one of the largest manufacturers of premium vehicles, with operations all over the world. The company provides leasing, fleet management, financing, insurance, and innovative mobility services. The company's VISION EQS provides a preview of the future large electric luxury cars. In addition, Daimler also produces high-end Mercedes-Benz vans and cars, Daimler buses and trucks, heavy duty trucks, and next-gen transportation systems.

LIST OF KEY COMPANIES PROFILED:

• Daimler AG (Stuttgart, Germany)


• PACCAR Inc. (Washington, United States)


• Hino (Tokyo, Japan)


• SCANIA (Södertälje, Sweden)


• Tata Motors (Mumbai, India)


• Navistar International Corp (Illinois, United States)


• BYD Auto Co., Ltd. (Shenzhen, China)


• AB Volvo (Gothenburg, Sweden)


• Toyota Motor Corporation (Toyota, Aichi, Japan)


• Proterra, Inc. (California, United States)

KEY INDUSTRY DEVELOPMENTS:

April 2020 – Volvo Group and Daimler Truck AG Signed a Non-Binding Agreement to Form New Joint Venture

The joint venture will produce, develop, and commercialize advanced fuel cell systems for heavy commercial vehicle applications. The goal of the joint venture is to achieve sustainable transportation and carbon neutrality in Europe by 2050. The Volvo Group will acquire 50% of this project in a debt-free transaction. Through this joint venture, both companies aim to obtain lower development cost profits and will also accelerate commercialization by introducing fuel cell systems for medium and heavy commercial vehicles.

January 2020 – Mercedes Benz AG (Daimler AG) and Zhejiang Geely Holding Group to Enter into a Joint Venture

A collaborative project under the name “Smart Automobile Co., Ltd” will be established under this new joint venture. This joint venture with Mercedes-Benz Networks, in cooperation with Geely's Engineering Network, will develop an advanced new generation of smart cars. It will fully focus on pure electric and connected cars to increase companies’ brand portfolio in the B segment market in China and the global market.

July 2019 – Daimler and BMW Signed a Long-Term Strategic Partnership

The main goal of the partnership is to develop technologies for automatic parking, driver assistance systems on highways, and highly automated driving. In addition, this partnership will achieve a higher level of automation in urban centers and urban areas. In addition, the partnership will also focus on launching this automation feature in the upcoming 2024 passenger car models.

REPORT COVERAGE

An Infographic Representation of Commercial Vehicle Market

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

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