Commercial vehicle market in Asia on track to fast recovery due to COVID-19 response, says Frost & Sullivan
Frost & Sullivan’s recent analysis, COVID-19 Growth Impact Assessment for the Commercial Vehicle Industry, shows that digital and connectivity services will significantly influence market recovery post-COVID-19 as telematics services, automated digital freight brokerage solutions, and digital retailing are expected to thrive. The global commercial vehicle market is expected to decline by 29% in 2020, and the recovery will be slow, with production volumes anticipated to reach pre-COVID-19 levels after 2024.
“The impact of the COVID-19 pandemic has forced companies and original equipment manufacturers (OEMs) to rethink business strategies with a greater emphasis on risk mitigation, operational flexibility, and innovative customer interaction and service measures,” said Marshall Martin, Industry Analyst, Mobility Practice, Frost & Sullivan. “With people staying indoors due to voluntary confinement or the imposed lockdown still in various regions, last-mile delivery of essential goods and services has experienced an uptick. The result is greater utilization of existing fleets and the realignment of fleet usage according to demand.”
Martin added: “Most countries resumed partial vehicle production by June, and a full recovery in production capacity is likely to take effect only during the fourth quarter of 2020. Asian countries such as China, India, and Japan, which accounted for more than 50% of global commercial vehicle production in 2019, are expected to recover faster than countries in the west, such as the United States and Germany, which are expected to recover only by late-Q4 2020.“
To mitigate risks while navigating the uncertainties posed by the impact of COVID-19, market players can pursue the following growth opportunities for each segment:
- Truck Digital Services Market: Digital freight brokerage and business analytics companies should leverage the current scenario as offline platforms are difficult to access.
- Connected Truck Telematics: Monitoring services, contactless delivery, digital PoD, and need-based services such as eCall, biometrics, and associated services will lead to greater market opportunity.
- Fleet Leasing Market: Alternate powertrain truck leasing agreements will provide opportunities as fleets can mitigate higher upfront costs, technology upgrades, and residual value risk in a nascent market.
- Electric Truck Market: Fleets should capitalize on government incentives and subsidies for electric vehicle purchases.
COVID-19 Growth Impact Assessment for the Commercial Vehicle Industry is the latest addition to Frost & Sullivan’s Automotive and Transportation research and analyses available through the Frost & Sullivan Leadership Council, which helps organizations identify a continuous flow of growth opportunities to succeed in an unpredictable future.