Geopolitical Tensions, Sustainability
Demands, and Digital Shifts Shape the Road Ahead
SAN
ANTONIO, Aug. 6, 2024 /PRNewswire/ -- This year,
the commercial vehicles sector - light, medium, and heavy – is
grappling with unprecedented growth barriers. Geopolitical
conflicts are disrupting supply chains and creating widespread
uncertainty. Meanwhile, the rise of sustainability as a megatrend
is ushering in stringent emission norms and regulatory hurdles.
Customer preferences are rapidly shifting towards digital
technologies and safety, prompting original equipment manufacturers
(OEMs) to heavily invest in platformisation and risk mitigation. At
the same time, the global economy remains precariously balanced,
with slower growth anticipated this year despite the industry's
long-term lucrative potential.
2023 marked a renaissance for the commercial vehicle industry
following a challenging 2022. Chinese automakers led a significant
recovery with a surge in domestic sales and an expanding
international footprint, propelling the industry forward. However,
2024 presents new obstacles as market saturation looms.
Innovation Amidst Adversity
Global conflicts and regional disputes further limit success.
Nevertheless, explains Marshall
Martin, Growth Expert at Frost & Sullivan,
advancements in electric vehicle (EV) technology, increased
modularity, and the rising importance of digital platforms are
expected to drive progress. "Recent cutbacks in EV investments may
bolster the adoption of alternative hydrogen internal combustion
engine (ICE) vehicles, which offer lower price premiums and are
readily adopted in the short to medium term," he adds.
Market Dynamics and Regional Variations
Developed markets like North
America and Europe are
expected to see a significant decline in truck sales due to excess
capacity and a lacklustre freight situation. In contrast, emerging
markets such as ASEAN and LATAM are set for a strong rebound,
driven by improved macroeconomic conditions following a challenging
2023.
China's strong recovery in
truck volume is expected to drive global growth in medium and
heavy-duty (M&HD) trucks to 3.8% in 2024, even as North America and Europe face significant contractions.
In 2024, medium-duty (MD) trucks are projected to grow faster
than heavy-duty (HD) trucks in most regions, except for
China and India, where there may be a notable shift from
MD trucks to light commercial vehicles (LCVs) and HD trucks.
The ASEAN region is experiencing the highest annual growth rate
at 7.5%, with light commercial vehicle (LCV) sales anticipated to
reach 727,700 units by the end of 2024.
Regulatory and Incentive Impacts
Stricter decarbonisation norms and added incentives for EVs and
alternative fuels, through tax cuts, subsidies, and other
government support programs, are expected to be particularly
impactful in regions like China
and India.
Despite the hurdles, the commercial vehicle industry is poised
to navigate through these challenges with strategic investments in
new technologies and markets. The industry's future will be shaped
by a delicate balance of addressing regulatory demands, consumer
preferences, and geopolitical realities. For further information
on this analysis, please click here
About Frost & Sullivan
Frost & Sullivan, the growth pipeline company, enables
clients to accelerate growth and achieve best-in-class positions in
growth, innovation, and leadership. The company's Growth Pipeline
as a Service provides the CEO and the CEO's Growth Team with
transformational strategies and best-practice models to drive the
generation, evaluation, and implementation of powerful growth
initiatives. Frost & Sullivan leverages over 60 years of
experience in partnering with Global 1000 companies, emerging
businesses, and the investment community from more than 40 offices
on six continents.
To engage with our growth experts for more information, click
here.
Contact:
Kristina
Menzefricke
Marketing & Communications
Global Customer Experience, Frost & Sullivan
kristina.menzefricke@frost.com
+44 (0)20 331 01228
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SOURCE Frost & Sullivan