The Commercial Vehicle Market in India is Expected to Grow at a CAGR of 2.97% From 2018 to 2030
The Indian commercial vehicle market is experiencing changes due to heavy regulatory winds, changes in customer preferences, segment shifts, increasing adoption of technology, and digitalization. Aspirational trajectory of economic potential, growing population, consumer commodity spending, infrastructure developments, overall manufacturing, and agricultural output will project the future of Indian commercial vehicle performance.
India is facing major imminent shift of emission from BS IV to BS VI from April 2020 leapfrogging BSV, a move that is aimed to curb threatening levels of air pollution in urban areas. Revised axle load regulation that was announced in July 2018 with immediate effect increases the vehicles permissible operating GVW capacity by approximately 12% to 15% had resulted in nationwide faster freight transportation. The major implication for trucks emanating from GST is the consolidation of widespread small to medium storage yards to regionally centralized large warehouses facility for hub–hub transportation. This has resulted in an increased demand for high GVW vehicles. Truck body code defines standards for body building to significantly improve the quality of vehicle applicable to both OEMs and local body builders. Vehicle scrappage policy, which proposes voluntary scrappage of old vehicle sunder incentive scheme, is unlikely. The Ministry of Road Transports & Highways has clear set regulatory roadmap with a focus on quality, safety, efficiency, and environment.
Proliferation of network and mobile phones is aiding traceability and accessibility of vehicles that have led to the adoption of connected business solutions that deliver profitable fleet management. Awareness of technology and realization of long-term TCO benefits drive the customer to invest in value-added features, moving away from the traditional price-based buying approach. Indian OEMs are heavily investing in R&D on performance enhancement features to withstand tough competition from foreign OEMs. Packaging beneficial features at attractive pricing is preferred during the introductory phase. Traditionally, a market where cowl is highly preferred, OEMs have considerably improved cabin styling and ergonomics that offer an overall superior driving experience.
The Government of India is ambitiously pursuing a transition to electrification and has announced FAME schemes to assist adoption. OEMs, technology companies, and relevant tier suppliers need to invest in relevant R&D with a long-term strategic implementation roadmap.
In 2018, India was the world’s 3rd largest commercial vehicles market and the fastest growing globally. Much of the country’s population falls into the working-age category, which provides a favorable environment for investment and production output. The permeating middle class is increasing the demand for commodity and consumption goods. High rate of urbanization and development in infrastructure and facilities will increase economic activity. eCommerce has emerged as a vital segment in the logistics sector, with the involvement of multinational companies competing to capitalize on opportunities. Overall manufacturing and industrial segment has garnered investment due to prevailing favorable economic conditions. The commercial vehicle market in India, which is a direct indicator of economic activity, is expected to grow at a CAGR of 2.97% from 2018 to 2030, with trucks performing at 2.82% CAGR and buses performing at 4.36% CAGR.
Government initiatives, a strong supplier ecosystem, availability of raw materials, human resource, and economies prospect enable India to emerge as a leading country in the commercial vehicle market. Both indigenous and foreign participants will steer technological and digital transformations needed to help organize the industry and progress advancement.
