LIGHT COMMERCIAL VEHICLE MARKET ANALYSIS

Market Size and Trends

Global light commercial vehicle market is estimated to be valued at US$ 612.53 Billion in 2024 and is expected to reach US$ 972.13 Billion by 2031, exhibiting a compound annual growth rate (CAGR) of 6.8% from 2024 to 2031.

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Global light commercial vehicle market growth is driven by rising demand for last-mile deliveries and increasing preference for rental and shared mobility services. Major fleet operators are increasingly procuring light commercial vehicles to support their delivery and logistic services, owing to growing e-commerce sales. Furthermore, increasing number of small businesses are also relying on light commercial vehicles to transport goods. Factors such as rising urbanization, growing business activities, and expansion of logistics and transportation infrastructure boosts demand for light commercial vehicles over the forecast period.

Urbanization and Last-Mile Delivery Demand

As urbanization continues to accelerate globally, there is a growing demand for efficient last-mile delivery solutions. Light commercial vehicles are pivotal in fulfilling this demand, serving as the backbone for logistics and e-commerce companies to deliver goods directly to consumers. The rise of online shopping and same-day delivery expectations further amplifies the need for nimble and versatile LCVs that can navigate urban environments efficiently. The demand for light commercial vehicles is expected to surge as companies seek to optimize their delivery operations in densely populated areas.

For instance, in April 2021, DHL Express made a significant move towards electrifying its last-mile deliveries in Europe by purchasing 100 E-Ducato electric vans from Fiat

Market Concentration and Competitive Landscape

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Governments worldwide are implementing stringent emissions regulations to combat air pollution and reduce greenhouse gas emissions. In response, manufacturers are compelled to develop cleaner and more fuel-efficient vehicles, including light commercial vehicles. This drive towards sustainability is pushing the adoption of electric and alternative fuel-powered LCVs. Businesses are increasingly embracing corporate social responsibility (CSR) initiatives, opting for eco-friendly transportation solutions to align with their sustainability goals. Light commercial vehicle market is experiencing a shift towards greener technologies, driving innovation and investment in electric and hybrid LCVs.

For instance, in November 2022, Ashok Leyland, a prominent commercial vehicle manufacturer under the Hinduja Group, announced its plan to bolster its market share in the electric vehicle sector. Executive chairman Dheeraj Hinduja outlined the company's EV roadmap, BS VI phase-2 readiness, and risk mitigation strategies during discussions with Shine Jacob.

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Customers want cars that use less fuel to help deal with higher fuel prices. Tough rules about emissions are causing problems for carmakers, both technically and financially. More companies, both local and from other countries, are joining the market with newer and better products. This means existing companies have to work faster to make new cars and improve how they make them to keep their customers.

Market Opportunities: E-commerce Boom and Delivery Demands

The increasing popularity of online shopping and the need for efficient delivery services are driving up the demand for small delivery vehicles. Thanks to improvements in battery and engine technologies, fully-electric delivery vehicles with longer ranges are now possible. Government incentives and rules are pushing for cleaner transportation options, encouraging businesses to invest in eco-friendly solutions. New types of delivery services, like those focused on the last leg of delivery, are becoming more common. By teaming up with other companies, businesses can broaden their range of services, especially in areas like digital connectivity.

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By propulsion type, internal combustion engine (ICE) segment is estimated to contribute the highest market share of 68.5% in 2024, owing to their widespread use and established infrastructure for refuelling. ICE vehicles have dominated the light commercial vehicle landscape for decades due to advantages in fuel efficiency and cargo capacities that suit the daily operation requirements of small businesses and logistics companies.

The development and rollout of gas stations across the world have made ICE fuels readily available even in remote locations, alleviating range anxiety concerns for commercial vehicle owners. Affordable ICE repairs and extensive aftermarket for spare parts has provided these vehicles high reliability.

Insights, By Vehicle Class, Class 2 (6,001-10,000 lbs) is the dominant segment light commercial vehicle market

By vehicle class, class 2 delivery trucks in the 6,001-10,000 lbs category  segment is estimated to contribute the highest share of 72.13% in 2024. These mid-duty trucks offer Goldilocks payloads that strike the right balance of cargo capacity without sacrificing manoeuvrability required for last-mile services.

Their dimensions allow efficient multi-stop routes within urban environments. Comparatively lower purchase prices than heavier Class 3 or Class 4 trucks also improve earnings potential per vehicle. Flexible cargo areas accommodate various delivery configurations from consolidated parcel to refrigerated loads. Growing e-commerce has exponentially increased the need for last-mile and same-day delivery services, benefitting Class 2 truck sales.

Regional Insights

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The light commercial vehicle market is poised for significant growth in Asia Pacific, dominating the global landscape with market share of 48.7% in 2024. This dominance is further amplified by the region's anticipated highest compound annual growth rate (CAGR) of 11.82% for 2024.

Asia Pacific is experiencing rapid economic expansion, particularly in countries like China. This translates to increased demand for goods and services, leading to a surge in LCV usage for last-mile delivery and urban transportation. Government initiatives in the region actively promote domestic production and technological advancements within the LCV industry. This fosters a robust ecosystem that caters to the growing demand.

Furthermore, the booming e-commerce sector in Asia Pacific heavily relies on LCVs for efficient delivery operations. The high population density and rapid urbanization in major cities also create a need for manoeuvrable and compact LCVs to navigate congested streets. These factors combined contribute to the significant and sustained growth of the LCV market in the region.

Market Report Scope

Key Developments

• In September 2022, FUSO, a subsidiary of Daimler Truck SE based in Japan, launched the next generation of its electric eCanter light commercial vehicles. These vehicles are set to hit the Japanese market in spring 2023.
• In June 2022, Nissan launched latest Townstar van, succeeding the e-NV200 model. The Townstar offers both petrol and fully electric engine options and aims to expedite the transition to zero-emission driving. This addition to Nissan's electric compact LCV series is engineered to meet evolving client needs with reliability, efficiency, and durability in mind.
• Renault introduced the Master E-Tech Electric in June 2022, featuring a 52 kWh lithium-ion battery and a 92 kW motor capacity. This electric van boasts a range of 126 miles.
• In May 2022, General Motors announced its plans to launch the Zevo 400 in 2023, a mid-sized electric van designed for short and frequent trips, equipped with ADAS features and offering a range of 250 miles.

*Definition: The light commercial vehicle market consists of smaller commercial vehicles that are primarily used for commercial purposes like delivery and transportation of goods. These types of vehicles include vans, pickup trucks, and sport utility vehicles that are designed to carry cargo and have a payload capacity of less than 3.5 tons.

Market Segmentation

• Propulsion Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Internal Combustion Engine (ICE)
  • Electric & Hybrid
•  Vehicle Class Insights (Revenue, USD Bn, 2019 - 2031)
  • Class 1 (<6,000 lbs)
  • Class 2 (6,001-10,000 lbs)
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Ashok Leyland
  • BAIC Group
  • BYD Motors Inc
  • Daimler AG
  • Dongfeng Motor Corporation
  • Ford Motor Company
  • Gaz Group
  • General Motors Company
  • Honda Motor Company
  • Hyundai Motor Company
  • Isuzu Motors Ltd
  • Mahindra & Mahindra
  • Nissan Motor Company Ltd