Global Industry Analysis (2017-2020), Growth Trends and Market Forecast (2021-2025)
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Sophistication of Real-time Data Gathering in Transportation Boosts Truck-as-a-Service Market
Global economic canvas has a defined place for the automotive industry. The automotive sector contributes substantially towards economic development to every region and nation, making it a pivotal mix in the national incomes. It is one of the noteworthy industrial and economic forces as it links multiple industries.
As vehicles are progressing rapidly, advanced features like global positioning system (GPS), platooning, tracking, and fleet management are likely to be crucial components instead of just an accessory. Disruptive advancements in the automotive industry such as ACES – autonomous driving, connected vehicles, electrification and shared mobility have created newer avenues for growth. A superior level of digitization such as telematics that operates on sophisticated software is projected to transforming the vehicles used for fleet building. Truck-as-a-service program has emanated based on the evolving technologies and an attempt from the OEMs to claw maximum clientele share through diversified strategies.
The autonomous and connected vehicle technologies are likely to gain unprecedented momentum as COVID-19 redefines the present. Trucking industry stakeholders are laterally making immense strides to equip and adapt to the new technologies as e-commerce sees an exponential spike. The commercial vehicle industry is evolving with four key trends vis-à-vis logistics, electrics, autonomy, and digitalization, displaying high growth potential.
Technological confluence in the trucking industry is making novel headways and providing growth platforms for several stakeholders. Players are investing in creating new services and solutions, thereby building innovative business revenue models.
In the coming years, connectivity is predicted to transform the trucking industry. Developed countries are already offering a plethora of services inclusive of prognostic analysis, asset management, and driver behaviour beyond tracking fleets. Analysts state that freight digitalization in the trucking industry is expected to aid in minimizing cost centres. It will tremendously help in positive development by enhancing overall efficiency, reduced empty miles accompanied by emission curbs.
Digitalization Propels Truck-as-a-Service Market
Truck dealers have shown resilience in pandemic times despite recession, fluctuating fuel prices, and hard-hit economic conditions. These dealers are striving to cater to consumer demands by adopting digital retailing services. This has eliminated the necessity for the end users to be in-person and interact with the employees for executing deals. Opined by many industry experts in global summits, digital retailing shall continue to stay even in the post-COVID-19 economy.
Many automakers and OEMs have thus started building truck-as-a-service business model to cater to the steady rise of digital retailing in the foreseeable future. In such a business model the responsibility of ownership and maintenance of trucks rests with the OEMs while ensuring a guaranteed uptime to the operators who utilize truck-as-a-service. This program is specifically designed for effective fleet management and is equipped with the appropriate use of advanced tools and data analytics. Thus, the elimination of high capital investment in the fleet operator business is expected to encourage uptake of truck-as-a-service by end users.
Truck-as-a-service program mitigates any accidental risk by constant driver monitoring and vehicle prognostics program. Truck-as-a-service business model eliminates hassles of vehicle downtime and maintenance cost for the end users, which makes it an ideal solution in a time when soaring fuel prices dictate logistic costs. Volvo, Volkswagen, and Daimler AG are investing in such programs, benefitting several fleet operators. These programs have assisted the operators in minimizing their cost centres, bolstering their profit margins.
Pent Up Demand with COVID-19 Lockdown Paves New Roadways
COVID-19 constrained business developments in several nations due to lockdowns. This in turn has increased the demand-supply issues and equally raising concerns about business sustainability. With lesser standards and infrastructural challenges, the market faced setbacks up to a certain extent during the lockdown. However, with easing conditions, the demand upheld for truck services as the sale of essential goods remain inevitable.
Increasing connectivity features, even in entry level vehicles, are likely to pave a new set of opportunities for the market to grab. The key players of the market are clawing upon such opportunities for a better market share, thus deploying strategies and partnering with major automakers. As COVID-19 ebbs, digitization is expected to revolutionize the automotive industry, which shall provide the necessary thrust to the market.
North America and Asia Pacific to Stay Ahead with Focus on Connected Devices
Fast-paced digital transformation across developed regions is expected to keep North America in the lead in the global truck-as-a-service market. Integration of connected devices in North America has jumped over the past decade. It is highly probable that nearly half of the total available market share is expected to originate from North America.
Meanwhile, Asian economies too are being touted to gain momentum over the coming years due to the widespread utility of smart devices in the trucking industry. Factors such as rising e-commerce activities, online purchasing and budding demand for last mile deliveries are expected to significantly propel the market growth over the foreseeable future. With increased connectivity solutions, data security is anticipated to become more critical. The trucking industry and governments need to ensure the digitally enable solutions to be environment friendly and pragmatically safe in nature.
Incumbent Players Likely to Take Market to New Highs
Increased connectivity features in the new age trucks are paving new lucrative opportunities. Automation solutions are driving the change in the truck-as-a-service market. Competitiveness amidst the key players and entry of new players is resulting in stiff competition.
The market has witnessed significant investments from venture capitalist. Provision for timely updates with effective fleet management at minimal costs is likely to provide a competitive edge to the key players in this cut-throat competitive business scenario.
MAN SE one of the pioneers of this technologies has nearly 15,000 trucks under this business model in U.K, which they have termed as ‘servitization’. The trucks are owned by Man, while the risk and truck maintenance is managed by the company through advanced telematics and digital connectivity. Man follows a pay-per-use model rather than operators owning the trucks.
Some of the key stakeholders dwelling and supporting truck-as-a-service business model include Daimler AG, MAN SE, Nikola Corporation, Fleet Advantage, Trimble Transportation Enterprise Solutions Inc., Traton SE, Tata Motors., Scania AB, PACCAR Inc., and Navistar International along with few of the research institutes and associations.