"Market Intelligence for High-Geared Performance"
The Russia commercial vehicle market size was USD 9.32 billion in 2020. The market is projected to grow from USD 9.14 billion in 2021 to USD 11.31 billion in 2028 at a CAGR of 3.1% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with Russian commercial vehicles witnessing a negative demand shock across the country amid the pandemic. Based on our analysis, the market exhibited a decline of -14% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The market in Russia is strongly dependent on local demand. Despite the oil rate fluctuations and rising inflation at the end of 2019, the Russian automotive industry has recovered speedily due to government incentives supports under some programs. Moreover, the bus market and truck sales in Russia has risen due to the efforts & innovations from the domestic players such as KAMAZ, GAZ, LADA, UAZ, MAN, Scania, and others. The central pillar for Russia's growth is their government’s supports of the local manufacturers. Furthermore, the additional demand for the buses was seen in 2018 due to the FIFA world cup 2018 in Russia. The government also continued to support bus manufacturers, including schools under a federal program.
Additionally, tightening environmental standards, the need for park renewal of the commercial vehicles, and the rise of the sharing economy are the parameters expected to transform the market in larger cities in the medium run.
Decline in New-vehicle Demand Owing to COVID-19 Pandemic Has Impacted the Market Growth
Overall Russian economy is strongly affected due to the impact of COVID-19 pandemic. The automotive sector especially commercial vehicle segment has seen higher impact and as a result there is decline in the market. Further, the effects of the COVID-19 will be felt for long term and the complete recovery of this market will take around 3-4 years. Moreover, the entire supply chain of industries has been affected due to COVID-19 and certain vendors have announced that there may be delay in the payments to their suppliers that will cause further disturbance and automotive parts industry is also affected. Thus, these factors are anticipated to hamper the market growth across the country during the forecast period. Moreover, Europe has faced production interruptions at many tier-one suppliers. Due to the COVID-19 pandemic, the lockdown and economic crisis have severely impacted truck manufacturers' financials in 2020, with demand decreasing in some countries. For instance, Russian truck production fell to -7.3% in 2020 to just 74,780 units, the lowest annual output compared to the previous year. The importance of automated trucks generates a considerable amount of growth despite COVID-19 pandemic. It provides a contactless solution for transportation and avoids a companion worker's need to operate manually.
Companies such as KAMAZ PTC and Scania have seen a decline of around 6-12% in revenue due to the covid effect. This market in Russia will need 2-3 years to reach the pre-crisis level. Although the prediction of pandemic's span is difficult to expect, but the governments regulations and companies steps using various safety procedures & norms are likely to favor the automotive market.
Request a Free sample to learn more about this report.
Increasing Electrification Of Vehicle And Adoption Of Advance Technologies Will Set a Positive Trend for Market Growth
The rising air pollution caused by the fuel emitted by conventional vehicles is leading to environmental crises. This has encouraged manufacturing companies to shift towards sustainable sources of energy. The public transportation systems adopt electrification in commercial vehicles to promote zero-emission public transport while keeping the environment clean and breathable for the residents. The Russian government plans to invest around 10.5 billion dollars into electric and hydrogen vehicle development by 2030, showing prominent growth in commercial electric vehicles.
The OEMs are also working towards reducing the cost of batteries to encourage electric vehicles in the country. Various prominent players such as KAMAZ, Daimler, and Volvo are shifting towards electric vehicles to meet the rising market 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. Similarly, commercial vehicles also observe a trend of automation driving the market growth. For instance, Moscow’s vast bus and tram network controller, Mosgortran, plans to add 2000 electric buses for public transportation by the year-end of 2020; Moscow is also preparing for fully electric buses by replacing all petrol or diesel-powered vehicles for public transportation by 2030.
In addition, Russian domestic manufacturers are also actively contributing to commercial vehicle's electrification with multiple strategies. For instance, in April 2020, MW motor and UAZ company has planned to build a four-wheeler off-roader, electric 469 Hunter. Similarly, one of Russia’s leading players, KAMAZ, has already partnered with Cummins to electrify buses and trucks. (fully electric & hybrid models).
Development In Road Infrastructure And Industrialization, Government Support And Economic Performance Will Boost Market Growth
The rapid growth in the population and the increasing urbanization, expansion in the industrial sector, and developing infrastructures are the foremost reasons for the development of the market in Russia The industrial sector is expanding strongly, giving rise to high amounts of jobs in various sectors such as mining, construction, and tourism. Further, it has increased the number of commuters, thereby creating a high demand for public transport.
Large-scale investment projects under Public Private Partnership may give a boost to demand in the medium run. According to the government’s plans, expenditures on infrastructure projects are expected to total RUB 6.3 trillion between now and 2024. Government Support, the open business, and “Russia Hauler” state programs will increase demand for new trucks.
Furthermore, stabilizing macroeconomic indicators, entrepreneurs' growth, and revitalizing industries that use trucks (e.g., construction, commerce, and manufacturing) will positively impact the market. Also, rising SME activities across the country contribute significantly to recovering Russia’s economy that will further boost the sales.
With its vast oil reserves, Russia was the world’s 2nd largest oil producer in 2019, which will help develop the market. In Russia, over 40% of buses are 15 years or older and will need to be replaced in the near future is anticipated to show growth for the market. Developments in buyer structures, the E-commerce sector began to grow, requiring fast delivery of goods and more transport, all of which positively impacted commercial vehicle sales.
Impact of Covid-19, Economic Condition, People Purchasing Power Constraint, May Restrain Market Growth
The truck segment is more sensitive to macroeconomic changes than the passenger cars segment. The economic slowdown in 2019 triggered by a slump in retail and construction activity has negatively affected Russian truck sales. Furthermore, the critical challenges consumers face in Russia are high maintenance, cost of repairing, product compatibility, product history, and lifecycle.
Due to economic growth slowdown, lower oil prices, and devaluation of the Russian ruble, all such factors altogether have affected consumer spending and thus resulted in the overall decline of the market growth & demand. In addition, the high risk of cybersecurity threats and the complexity faced by the driver in operating the advanced 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 coupled with the lack of skilled laborers and high replacement and maintenance costs of these systems are factors likely to restrain the Russia commercial vehicle market growth.
To know how our report can help streamline your business, Speak to Analyst
Diesel Segment Dominates Market
Based on the power source, the market is segmented into Gasoline, Diesel, HEV/PHEV, BEV, and Fuel Cell Vehicles.
The diesel segment holds the largest share of the Russian market, and the BEV segment is expected to lead throughout the forecast period. The diesel segment dominates the Russian light commercial market as the heavy-duty vehicle uses diesel as propulsion. The oil prices have seen a rise up to USD 63.0 per barrel in 2018, which would have impacted the sales positively in Russia. The gasoline segment also contributes significantly to diesel as the manufacturer preferably uses diesel as a propulsion medium for most commercial vehicle types. The LCV from the domestic manufactures and imported CV have gasoline as a power source.
Moreover, the HEV/PHEV vehicles have seen a gradual increase in sales from 2019, and companies are actively developing and involved in strategies for the broader growth of these vehicles. Furthermore, the Russian commercial vehicle market has also seen gradual electric bus (Battery EV) adoption in public transportation. For instance, in 2018, the Moscow government bought its first electric buses, and it plans to buy more than 800 every year for the city to operate an electric bus park of 1,800 units by the end of 2023. Additionally, Russia’s EV share will grow from 0.05% to 15% in the next 9 years in the global market.
The fuel cell segment is currently in the development phase as many Russian companies have started taking initiatives to explore potential opportunities in the hydrogen market. The continued government support in various policies and the local companies' recent development to develop hydrogen-powered trucks will demand the market in the future.
Light Commercial Segment to hold Largest Market Share
Based on the vehicle type, the market is segmented into Light Commercial Vehicle (LCV), Heavy Commercial Vehicle (HCV), and Bus & Coaches.
The LCV segment accounts for the largest share in the Russian market. The dominance can be attributed to various factors, including a large number of vehicle presence and rising disposable incomes. Further, the LCV segment will be dominating in the forecast period due to predicted sales and increasing market development in the Russian market. Moreover, consumers' preferences, government spending, and the adoption of new technology in LCVs will significantly help grow their business in the coming years.
The HCV segment has low growth and a high penetration rate in 2020. Growing demand for excavation trucks in countries for industrial application and increasing government emphasis on the electrifying trucking industry segment is anticipated to boost the demand for HCV in the Russian market.
Domestic players' initiative to reduce Co2 emission and stringent regulation related to the transporting vehicles, governments inclination towards safety measures of passengers coupled with the development of charging infrastructure & use of advanced technology for the buses, coaches will help boost demand for this segment in coming years.
Partnership With Local And International Players To Brighten its Market Prospects
In May 2021, KAMAZ and TATNEFT announced a joint venture to build refueling complexes using liquefied natural gas refueling units (LNG) to help consumers adopt LNG commercial vehicles.
In September 2018, KAMAZ and Cummins signed a MOU to develop electrified power solutions for a new product line of KAMAZ battery-powered vehicles.
In 2020, Volvo AB group had a strategic alliance with ISUZU group to divest UD Trucks to Isuzu Motors.
In November 2020, Volvo Group signed a joint venture agreement with Daimler Truck AG to develop and commercialize fuel-cell systems for heavy duty trucks.
An Infographic Representation of Russia Commercial Vehicle Market
To get information on various segments, share your queries with us
The Russia commercial vehicle market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the marketing report encompasses several factors contributing to the market's growth over recent years.
Value (USD Billion)
By Vehicle Type
By Power Source
Fortune Business Insights says that the Russia market size was USD 9.32 billion in 2020 and is projected to reach USD 11.31 billion by 2028.
In 2019, Russia stood at USD 10.62 billion.
The market is projected to grow at a CAGR of 3.1% and will exhibit steady growth during the forecast period (2021-2028).
The diesel segment is the leading segment in this market.
The increasing electrification, road infrastructure and construction activities, government support, and economic performance are expected to drive market growth.
KAMAZ is the leading player in this market.
The increasing electric mobility adoption and favorable government initiatives to use lightweight materials are expected to drive market growth.
“This report is really well done and we really appreciate it! Again, I may have questions as we dig in deeper. Thanks again for some really good work.”- U.S.-based biotechnology company focussing on treatment of chronic pain.
“Kudos to your team. Thank you very much for your support and agility to answer our questions.”- Europe-based provider of solutions to automate data centre operations.
“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”- India-based manufacturer of industrial and specialty intermediates with a strong global presence.
“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”- One of the largest cosmetics company in the world.
“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”- U.S. based startup operating in the cultivated meat market.
“We received the below report on the U.S. market from you. We were very satisfied with the report.”- UGlobal hearing aids manufacturer.
“I just finished my first pass-through of the report. Great work! Thank you!”- U.S. based solar racking solutions provider.
“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”- World’s leading advisory firm.
“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”- Germany based machine construction company.
“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”- Japanese manufacturing company of stationery products.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry