Light Commercial Vehicles Market
Global Industry Analysis (2017 – 2020), Growth Trends and Market Forecast (2021 – 2025)
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Light Commercial Vehicles Market Gains Ground as Urban Areas Restrict Use of Heavy-duty Vehicles
Light commercial vehicles (LCV), categorized as the ones that weigh between 3.5-7 tons, have gained significant momentum in the past two decades. LCVs are extensively used for transporting good and ferrying people. Light commercial vehicles also have a wide preference in the metropolitan areas, chiefly due to restrictions on the use of heavy-duty vehicles in urban areas. They commonly include vans, three-wheelers, pickup trucks and minibuses, which fit the weight criteria and are up to 7 meters in length. Changing norms and the convenience of driving offered by LCVs are likely to drive the global market in the foreseeable future.
Use of Light Commercial Vehicles for Last Mile Delivery Boosts Sales
A high demand witnessed from the urban areas due to the growing influence of the last mile delivery solutions arising due to increased e-commerce has stoked demand. With the increasing demand for fruits and vegetables from rural sectors demand in these areas has seen an uptick considerably. Incorporation of advanced telematics, with demand specific transport solutions and services, are augmenting the demand of light commercial vehicles. Growing popularity of fleet sharing is expected to bolster the market growth over the foreseeable future.
Electric LCVs are predicted to gain momentum on the back of low maintenance, changing consumer buying patterns, and transition towards strict emission standards occurring in China, India, Europe, and Japan. Existing restrictions in some pockets of the globe on account of COVID-19 lockdowns shall provide a thrust to last mile delivery solutions and e-commerce sectors specifically for essential items, which in turn shall augment the LCV demand.
Electric LCV or eLCV is expected to grow noticeably with new product launches as joint corroborations between OEMs across the globe see a rise. Advanced safety, connectivity, and autonomous features are expected to provide immense opportunity to the LCV market. For instance, Volkswagen AG, Nikola Corporation, General Motors, Renault–Nissan–Mitsubishi, Ford Motor Company, and Daimler AG have scheduled plans with new launches in the years ahead.
Light Commercial Vehicles Witnessing a Bumpy ride
COVID-19 has led to massive disruption in the supply chain of the vehicle industry. Raw material and component suppliers were badly affected due to domestic and international ban on transportation and logistics. Furthermore, lockdown led to complete shutdown of manufacturing plants and persistent sporadic lockdowns in some pockets of the global the vehicle production continues to suffer the burns of the enduring pandemic.
This led manufacturers to suspend their vehicle production during the growing severity of the pandemic, affecting the timely deliveries of the existent demand. As a result, mounting overheads is levying financial pressure on the manufacturers, hindering the market growth.
Nonetheless, the monthly demand has shown some signs of revival. With growing inclination towards proliferating last mile delivery business catered by the light vehicles, the LCV market is predicted to witness a demand growth over the coming couple of years. COVID-19 pandemic had devastating effect worldwide, as purchasing vehicles has been delayed combined with the disrupted deliveries of new sales.
Electric pickup trucks are gaining importance, chiefly driven by stringent emission norms leading to new OEM collaborations that are engaging together to launch e-pickups with substantial investments.
Light Commercial Vehicle Market Gains Traction in North America and Europe
North America leads the LCV market due to the high demand for pickup vehicles. The rising vehicle miles travelled and weekend adventure trailing sports activities are gaining momentum, which, in turn, are driving the demand for pickup and off-road vehicles. The changing lifestyle supplemented by the new product launches in North America is expected to fuel the market demand over the couple of years.
Asia Pacific is likely to experience a spike in the market demand in the foreseeable future while attempting to facilitate the dynamic customer and business requirements through last mile delivery solutions. China, India, and Japan are some of the nations with budding e-commerce businesses and other online services. Governments of these countries have recognized the emerging growth prospects and sculpted policies relevant to foreign investors, thus encouraging major OEMs to help develop their bases.
Asia Pacific is witnessing significant business developments combined with the establishment of new manufacturing bases by major OEMs in the region. China-based LCV market dominates the Asian region and likely to continue over the couple of years.
Global Light Commercial Vehicles Market: Competitive Landscape
Growing partnerships and joint ventures of LCV OEMS with different technology and logistic partners are likely to propel the market growth. Research and development investments from start-ups and automakers have been pouring in for the development of eLCVs, which in turn is likely to pave the way for eLCV product development.
In an attempt to capture market share, the major manufacturers are adopting different business strategies such as new product development and mergers and acquisitions.
Tesla, Daimler AG, Nikola Corporation, SGMW (Wuling Motors), AB Volvo, Volkswagen AG, Hyundai Motor Company, Dongfeng Motor Corporation, Tata Motors, Ford Motor Company, Groupe PSA (Stellantis), FCA (Stellantis), General Motors, and Groupe Renault are some of the leading players of the market.