The global commercial vehicles market size is projected to hit over USD 2.70 trillion by 2027, expanding at a CAGR of 7.1% during the forecast period 2021 to 2027.
Increased urbanization, coupled with rising spending on infrastructure development in emerging economies such as China, India, and Turkey, are expected to drive the market over the forecast period. Several suppliers are shifting their focus on improving R&D capabilities while enhancing operational efficiency, which is also projected to play a pivotal role in boosting market growth.
In addition, increasing penetration of electric commercial vehicles is also anticipated to contribute toward market expansion over the coming years. Adoption of electric vehicles (EVs) is primarily driven by need to meet emission reduction standards and regulations enforced by government bodies worldwide. Commercial vehicle telematics is another trend that is gaining traction and is anticipated to have a positive impact on the market over the forecast period.
To meet changing market needs, original equipment manufacturers (OEMs) across the globe are focusing on integrating innovative technologies, such as keyless entry/ignition, engine diagnostics, mobile connectivity, and an array of novel applications that assist in vehicle control. All these efforts by OEMs are expected to significantly contribute to global market growth over the coming years.
Surging Demand for Electric Vehicles to Stymie Market Growth
A commercial vehicle is used for transportation of goods or to carry passengers. Accounting to the rising daily commute rate and increasing long distance transportation and trade activities, there is a massive demand for commercial vehicles across the world. The presence of several large scale companies in several countries across the world has resulted in a healthy market competition. Thus, SMEs are finding it difficult to operate seamlessly. As large scale companies hold the privilege to acquire smaller companies as well as other large scale companies, SMEs look to implement newer strategies that will help them attract a wider consumer base. Although the market looks set to perform well in the long run, there surely are a few short term hurdles, mainly due to the pandemic.
The recent coronavirus outbreak has had a negative impact on several businesses across the world. With unified efforts taken to curb the spread of the disease, businesses across the world have been compelled to shut down. The measures taken to minimize the impact of the disease will ultimately affect several manufacturing units, with strict measures forcing people to stay indoors. The commercial vehicle sector is among the few industries that have been hit the most among all industries during the Coovid-19 pandemic. With social distancing practices implemented across the world, commercial vehicle businesses have dramatically gone down and it will be a while until we may see newer variants at a similar pace to that in the past few years.
The commercial vehicles market can be largely categorized into light commercial vehicles (LCVs), heavy trucks, and buses and coaches. The LCVs segment accounted for more than 76.0% of the total market revenue in 2020 and is expected to register a CAGR of 8% over the forecast period. This growth can be attributed to the dynamic nature of these vehicles, which enables them to be modified and be used for transportation of passengers and goods. These vehicles are cost-effective and aid in reducing emissions, which also boosts segment growth.
The buses and coaches segment is anticipated to gain traction over the forecast years owing to increased adoption in the tourism and healthcare industries. Buses and coaches are the most cost-effective mode of transportation, which is a prominent factor positively affecting its sales. The heavy trucks segment is forecast to expand at a moderate growth rate from 2021 to 2027.
The logistics segment witnessed significant demand and captured a sizeable market share in 2020. It is anticipated to expand at a value-based CAGR of over 8.0% over the forecast years. Increasing trade activities worldwide are expected to drive the segment in the coming years.
Affordability and accessibility of passenger transport and rising expenditure on commute in developed and developing economies are important contributors to the growth of the passenger transportation segment, which is slated to register a revenue-based CAGR of just under 8.0% over the forecast period.
The North America market captured the largest share by revenue as well as volume and is expected to exhibit a value-based CAGR of over 6.45% over the forecast period. Increase in financing options, continuous investment in infrastructure development, and rising focus of governments on in-house automotive production are key factors positively impacting regional growth.
The Asia Pacific market is projected to witness the highest CAGR of more than 8.5% over the forecast period, in terms of both volume and revenue. Increasing road infrastructure, coupled with rising manufacturing facilities owing to cost-effective labor and raw materials, especially in developing economies such as China and India, are expected to stimulate market growth. The MEA and Europe markets are expected to witness moderate growth with rising industrialization in these regions.
Base year for estimation: 2020
Historical data: 2017 - 2020
Forecast period: 2021 - 2027
Company Mergers are an Increasing Trend Among Major Companies in the Global Market
The report encompasses several factors that have contributed to the growth of the market in recent years. Among all factors, the increasing number of company mergers and acquisitions as well as collaborations has made the highest impact on the growth of the market. Accounting to increasing market competition, it is observed that major companies are benefiting from collaborations and joint ventures.
In July 2019, Daimler announced that it has entered into a strategic partnership with BMW for developing a new technology for automatic parking as well as driver assistance system on highways. This partnership will also help the companies to achieve a higher level of automation in urban centres. Increasing number of company mergers and acquisitions will have a massive impact on the growth of the global market in the coming years.
Light Commercial Vehicles (LCVs)
Buses & Coaches
Mining & Construction
Middle East & Africa
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