May 27, 2024
Light Commercial Vehicle Market

Rising Penetration Of Evs Set To Drive Growth Of Light Commercial Vehicle Market

The global Light Commercial Vehicle Market is estimated to be valued at US$ 633.98 Bn in 2023 and is expected to exhibit a CAGR of 8.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Light commercial vehicles are typically used for transportation of goods and light loads as well as for carriage of passengers. They include delivery vans, pickup trucks, mini buses and other utility vehicles having Gross Vehicle Weight Rating (GVWR) of less than 5 tons. Key advantage of LCVs is their versatility to handle both passenger and freight transportation needs coupled with their relatively low operational and maintenance cost compared to heavy commercial vehicles. Growing small business sector along with rising last mile delivery have been primary drivers of demand for light commercial vehicles in recent years.

Market key trends:

One of the key trend gaining traction in the light commercial vehicle market is rising adoption of electric vehicles. Stringent emission regulations and initiatives towards carbon reduction are prompting more commercial fleet owners and last mile delivery companies to switch to electric light commercial vehicles. Major automakers are aggressively launching multiple EV models and concepts in the light commercial vehicle segment. Rising number of charging infrastructure and improving battery range are making electric LCVs an increasingly viable ‘green’ alternative. Growing focus on sustainability in the transportation sector is expected to further accelerate EV penetration in the light commercial vehicle market during the forecast period.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate due to the high capital requirements and economies of scale needed to enter this market.

Bargaining power of buyers: Buyers have some bargaining power as there are many established players in this market offering similar vehicles.

Bargaining power of suppliers: Suppliers have moderate bargaining power due to the availability of component suppliers and established distribution channels.

Threat of new substitutes: The threat of new substitutes is low as light commercial vehicles have certain advantages over other transportation modes.

Competitive rivalry: The competitive rivalry is high due to the presence of many international and domestic players competing on the basis of product features, price, quality, distribution, and after-sales service.

Key Takeaways

The Global Light Commercial Vehicle Market Size is expected to witness high growth, exhibiting CAGR of 8.1% over the forecast period, due to increasing demand for last-mile delivery and e-commerce growth. Asia Pacific region dominates the light commercial vehicle market with maximum share. China, India, and Japan are the fastest growing markets in the region owing to rising purchasing power, increasing commercial activities and industrialization.

Key players operating in the light commercial vehicle market include Daimler AG, Ford Motor Company, Renault SA, Ashok Leyland Ltd, VE Commercial Vehicles Limited, Tata Motors Ltd, SML Isuzu Limited, GM Group, Mahindra & Mahindra Ltd, Volkswagen AG, Toyota Motor Corporation and Stellantis NV. Daimler AG and Ford Motor Company captured significant share in the global market. Other regional players like Ashok Leyland Ltd, Tata Motors Ltd and Mahindra & Mahindra Ltd also have strong presence in the Asia Pacific region.

The global light commercial vehicle market size for 2023 is US$ 633.98 Bn. Rapid growth of e-commerce and evolving logistics infrastructure especially in developing countries are expected to drive the market over the forecast period. Further, technological advancements in connectivity, alternate fuels and electric LCVs will open new growth avenues for key players in coming years.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it