India Commercial Vehicle Market to be Dominated by Light Commercial Vehicles Segment During the Forecast Period

The India Commercial Vehicle Market is being driven by factors such as government infrastructure expenditure, replacement demand, development of e-commerce and back-to-work scenarios. 

 

According to TechSci Research report, “India Commercial Vehicle Market– By Region, Competition Forecast & Opportunities, 2019-2029F,” the India commercial vehicle market is expected to grow during the forecast period due to rapid urbanization, strong replacement demand, better financing options, government expenditures on infrastructural development across the country, etc. The commercial vehicle sector is highly interconnected with other sectors, especially with the manufacturing sector, so any growth or development that occurs in these areas will lead to the growth of the commercial vehicle sector in India.

A commercial vehicle is any vehicle which is used to transport goods or passengers. A commercial vehicle will usually be able to carry two, three or more passengers, but behind the seating will be something designed to carry materials or tow something large, and this feature will make up most of the commercial vehicles. Government initiatives are going to play a vital role in the growth of the India commercial vehicle market. The expenditure on infrastructural development is going to drive demand across segments and applications. Scrappage policy which is laid down in Union Budget 2022-23 has put special emphasis on allocating funds to replace state or government owned vehicles older than 15 years. This will help in maintaining replacement demand in the market. To boost the adoption of electric vehicles, the government has come up with GCC model (Gross Cost Contract, with ‘Own and Operate’ model) to increase the fleet of e-buses in public transport.

The commercial vehicles in India are divided into three categories based on the gross vehicle weight, including light commercial vehicles (LCV), medium commercial vehicles (MCV) and heavy commercial vehicles (HCV). Vehicles with gross weight less than 7.5 tons are classified as light commercial vehicles, vehicles with gross weight between 7.5 tons and 16.2 tons are classified into medium commercial vehicles. And vehicles with more than 16.2 tons gross weight are called heavy commercial vehicles. In India, major portion of sales in commercial vehicles segment is occupied by LCVs followed by MCVs and & HCVs. LCVs come with several usages along with fuel efficiency. There sales have increased considerably after the pandemic fueled by the proliferation of multiple business models and government initiatives like National Retail Policy. The transportation of goods follows a hub-and-spoke model in country in which goods arrive at a certain hub through medium and heavy commercial vehicles and are then distributed in surrounding areas in LCVs. However, since last year medium and heavy commercial vehicles are marking huge YOY growth. Key drivers for medium and heavy commercial vehicles are coming from the steel, cement and mining industries due to increased spending on infrastructure. In addition to this, demand for passenger-transporting buses is also taking off due to reopening of schools, offices and inter-city travel.         

 

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Commercial vehicles are further classified based on the propulsion type including diesel, petrol, and alternate fuel. LCVs can be found operating on diesel, petrol, and alternate fuel (CNG, blended fuel, electric etc.). The major portion of fuel in LCVs is dominated by diesel, followed by CNG and then petrol. CNG powered LCVs have more fleet as compared to LCVs powered by petrol because they deliver better fuel efficiency and simultaneously lower emissions as well. But medium and heavy commercial vehicles are mostly driven by diesel and very few of them use CNG. The reason why they use diesel is because torque is the major and foremost requirement in these vehicles which can only be provided by diesel engines only. Diesel fuels have high compression-resistance and thermal efficiency which results in higher torque, which is not the case with petrol engines. Alternatives such as electric trucks have been tested on the ground and are contributing minutely to the sales of medium and heavy commercial vehicles, but they will only get pace in this segment if they are able to meet the mechanical requirements of this industry.

Moreover, commercial vehicles are also divided based on the application, such as: logistics, mining, construction and others. Every industry requires different kinds of commercial vehicles depending upon their requirements. For example, the logistics industry requires commercial vehicles which provide better fuel efficiency, and at same time carry maximum quantity of goods. Therefore, they require both LCVs for transporting goods with shorter distances and within the cities and rural areas where medium and heavy commercial vehicles are not allowed. Mining and construction industries require mostly medium and heavy commercial vehicles because they need to carry heavy loads no matter how.

 

Key market players in the India commercial vehicle market include:

• Tata Motors Limited
• Mahindra & Mahindra Limited
• Eicher Motors Limited
• AB Volvo
• Hinduja Motor India Limited (Ashok Leyland)
• Force Motors Limited
• Hyundai Motor India Limited
• MAN Truck & Bus India Private Limited
• Daimler India Commercial Vehicles Private Limited

 

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“There are various factors which are contributing to the growth in India commercial vehicle market, such as rapid urbanization, better financing options, strong replacements, along with supportive government policies. India is focusing extensively on improving road networks and infrastructure in which commercial vehicles are an indispensable part. Apart from this, continuous technological advancements are helping industries associated with commercial vehicles in cost cutting and better management, thus, creating more scope for commercial vehicle market in India.”, said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.

“India Commercial Vehicle Market By Vehicle Type (Light Commercial Vehicles, Medium Commercial Vehicles, Heavy Commercial Vehicles), By Propulsion Type (Petrol, Diesel, and Alternate Fuel), By Application (Logistics, Mining, Construction and Others), By Region, Competition Forecast & Opportunities, 2019-2029F,” has assessed the India Commercial Vehicle Market's future development potential and provides data and information on market size, structure, and projected market growth. The report's goal is to give current market knowledge and assist decision makers in making informed investment decisions. Furthermore, the study identifies and analyses emerging trends, as well as key drivers, constraints, and opportunities in the India Commercial Vehicle Market.

 

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