by Light commercial vehicles such as pickup trucks, delivery vans and trucks are playing a key role in supporting the surging construction and infrastructure development activities across the globe. These vehicles are suited for transporting building materials, tools and equipment needed at work sites, enabling quick intra-city transportation of goods. With government spending on road and building projects rising significantly in both developed and developing countries, demand for light commercial vehicles is increasing steadily.
The global light commercial vehicle market is estimated to be valued at US$ 633.98 Bn in 2023 and is expected to exhibit a CAGR of 8.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Light commercial vehicles are extensively used in transportation and logistics of goods and services. They have large cargo area suitable for shipping a wide range of products and come equipped with features to improve fuel-efficiency and driver comfort. Ranging from small vans to pickup trucks and larger trucks, these vehicles support businesses in delivery of goods, transportation of raw materials and equipment rental. The growing e-commerce industry relying on last-mile delivery has further boosted demand. The global light commercial vehicle market is witnessing steady growth on account of expanding construction, manufacturing and retail industries worldwide.
Market key trends:
Growing infrastructure investment in developing economies: Countries such as India, China, Indonesia are undertaking massive road, rail and airport construction projects which is driving the demand for light commercial vehicles. Governments are facilitating funding for infrastructure development to bolster economic growth.
Rising preference for rental and shared fleets of commercial vehicles: Companies are increasingly adopting rental models instead of owning large commercial vehicle fleets to control costs. Many players offer light commercial vehicle rentals catering to varied short-term transportation needs of businesses.
Focus shifting to electric light commercial vehicles: Stringent emission regulations and need to reduce carbon footprint is prompting vehicle manufacturers to invest in electric light commercial vehicle models. Government incentives and falling battery prices are expected to accelerate adoption of electric vans and trucks in the coming years.
Porter’s Analysis
Threat of new entrants: The light commercial vehicle market requires high R&D investments and capital expenditures to enter. Stringent emission norms also act as a barrier for new companies.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of multiple brands and options. However, commercial buyers prefer well-established brands for reliability and resale value.
Bargaining power of suppliers: Major suppliers include automotive component manufacturers and energy companies. Suppliers have moderate bargaining power due to the availability of substitutes and dependence of OEMs on suppliers.
Threat of new substitutes: Alternatives include electric commercial vehicles and ride-sharing. However, constraints in driving range and high upfront costs limit their adoption over the forecast period.
Competitive rivalry: The market is highly competitive with the presence of global and regional players. Factors like pricing pressure, brand perception and innovation intensity increase competition.
Key Takeaways
The Global Light Commercial Vehicle Market Demand is expected to witness high growth over the forecast period. Asia Pacific dominates the market with the largest share, led by China, India and Japan. Factors such as growing e-commerce, construction and tourism industries propel demand in the region.
Europe holds the second largest share in the light commercial vehicle market and is expected to grow at a steady pace during 2023-2030. Countries such as Germany, France, UK and Italy contribute significantly to regional growth owing to strong automotive manufacturing base. Stringent emission regulations are pushing OEMs to focus on electric LCVs.
Key players operating in the light commercial vehicle market include Daimler AG, Ford Motor Company, Renault SA, Ashok Leyland Ltd, VE Commercial Vehicles Limited, Tata Motors Ltd, SML Isuzu Limited, GM Group, Mahindra & Mahindra Ltd, Volkswagen AG, Toyota Motor Corporation and Stellantis NV. Major players are focusing on electric LCVs, connectivity features and expanding dealer networks globally to strengthen their market position.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
