The Light Commercial Vehicle (LCV) Market is poised to register a CAGR of over 3.0% over the forecast period (2020-2025).

  • Light commercial vehicles are largely used for carrying goods for shorter distances. The demand for LCVs is likely to increase as the logistics and e-commerce industries are growing rapidly. Also, the Rapid urbanization has created new retail and e-commerce platforms which require efficient logistics, leading to the growth of the Light Commercial Vehicles (LCV) market.
  • The growing stringent emission norms related to emissions, increasing oil prices, and rising penetration of downsized engines in LCVs are also acting as driving factors for the growth of the light commercial vehicle market. Moreover, the growth of the electric era of electric automobiles creating new opportunities for the manufacturers to invest in the development of electric light commercial vehicles. However, the demand for downsized engines is expected to increase the LCVs price, which is expected to hinder the growth of the LCV market over the forecast period.
  • The sales of LCVs are likely to continue to grow at the global level, owing to the growing consumer demand, continuous launch of new and upgraded models especially in the developing economies such as China, India, Brazil, etc.

Key Market Trends

Electrification of Light Commercial Vehicles Likely to Bring Growth Opportunities

With the growth of electrification in vehicles, the LCV market is witnessing collaborations among incumbent OEMs and start-ups alike in the production of electric LCVs (eLCVs). The primary reason for on-road vehicle electrification is the growing environmental concerns about the automotive sector’s contribution to climate change and the damaging effect on human health of exhaust pollutants.

Currently, the upfront cost of LCVs is greater than conventional fuel models, and LCV operators primarily base their purchase decisions on the total cost of ownership calculations, however, in the long run, the operators can save a significant amount on the overall operational by replacing conventional fuel models with the electrically powered, as electric drivetrains require less maintenance and offer efficiency.

Over the next forecast period, as battery pack prices decrease, electric drivetrain efficiencies improve and significant economies of scale savings are realized on the cost of electric components and vehicle manufacturing, it will become a competitive advantage for companies to operate electric vans as they will offer the lowest cost solution. The addition of road charges for diesel vehicles in low emission zones within urban centers will swing the Total Cost of Ownership (TCO) balance heavily in favor of electric LCV.

United States and China are likely to Lead the LCV Market

United States and China leads the light commercial vehicle market followed by Japan, India, Latin America respectively. The Chinese e-Commerce industry is continuously growing which is driving the LCV industry in the country. For instance,

  • Local technology companies such as Alibaba Group, Tencent, and JD are dominating a rapidly growing e-commerce ecosystem in the country
  • The rapid development of this industry combined with a large and growing digital consumer base has fueled tremendous growth both domestically and abroad via cross-border trade. Other factors driving the e-commerce business in the country are –
  • Establishment of e-commerce special trade zones in the country.
  • Rise in Chinese social media influencers.

Owing to the growing concerns on environment pollution, the US government has been consistently working and supporting various measures toward the growth of electric vehicle industry. For instance:

  • In January 2019, Kaiyun Motors cleared the necessary regulatory approvals to begin exporting its Pickman electric pickup trucks to the United States. According to founder Wang Chao, the company plans to sell as many as 10,000 of them annually in the United States.
  • With a load capacity of 1,100 pounds, top speed of 28 miles per hour, and driving range of 75 miles on a single charge, the Pickman is suitable for farm owners, factory employees moving loads at their work sites, and commuters.

Competitive Landscape

The major players in the Light Commercial vehicle market are Daimler AG, Renault SA, Volkswagen AG, Toyota Motor Corporation, Ford Motor Company, Ashok Leyland Ltd., Tata Motors Ltd., Mahindra & Mahindra Ltd., VE Commercial Vehicles Limited, SML Isuzu Limited, etc.

LCV manufacturers are developing advanced technologies and launching new products in order to stay competitive in the market. For instance,

  • In 2018, Truong Hai Auto Corporation (Thaco), one of the leading players in Vietnam, launched the new Mazda BT-50 pickup truck in Vietnam. The new pickup truck features an automatic transmission and a 2.2-liter engine version. The new BT-50 comes in 4 variants: BT-50 2.2L MT 4x4, BT-50 2.2L AT 4x2, BT-50 2.2L ATH 4x2, and BT-50 3.2L ATH 4x4.
  • In 2019, Toyota Motor Corporation officially unveiled its all-new 2020 Hiace MPV/Van in the Philippines. The all-new Hiace is the first Hiace model to be designed for overseas markets.
  • In 2019, Mitsubishi Motors Corporation (MMC) announced the launch of the new Delica D:5 all-round minivan in Japan.

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