Commercial Vehicles: A Global Strategic Business Report
San Jose, California (PRWEB) April 09, 2012
Follow us on LinkedIn – Demand for commercial vehicles closely correlates with an economy’s Index of Industrial Production (IIP), given the fact that transportation of goods, commodities and passengers, is a critical aspect of economic development. The manufacturing, agriculture, construction, and wholesale/retail trade industries, especially, are heavily reliant on the transportation industry. Efficient commercial transport systems provide both economic and social opportunities for economic growth by creating employment, investments and access to market opportunities. The importance of transportation can be put into perspective by the fact that transportation accounts for over 5% of the total cost of each unit of output in manufacturing, and represents over 18% of all household expenditures, and contributes between 10% and 18% towards an economy’s GDP each year. Logistics, distribution and passenger transportation industries are heavy end-uses of commercial vehicles. Given that mobility is a catalyst for industrialization, it is opportunities galore for both production and sales of commercial vehicles in developing markets in Asia-Pacific, Latin America, and Middle East. Developments in road networks/infrastructure are also expected to drive up demand for CVs in the region. Expansion of urban areas in term of sprawl area, growth in the size of population settlements and the ensuing need to travel longer distances are poised to benefit mass/public transportation systems, thus generating opportunities for vehicle fleet expansion.
As environmental health aligns with economic health the world over, OEM automakers design and development focus is projected to shift towards environmentally friendly features such as lower emissions and superior fuel efficiency. Stricter regulations surrounding environmental and passenger protection is stimulating technology transformation in the CV industry. Fuel-efficient cars, sophisticated safety features, intelligent navigation technologies are all poised to remain focal areas in the future. With automakers in the midst of engineering a turnaround, venture capital funding in innovative automobile technologies show promising signs of resurgence. Efficiency, comfort, style, safety, functional elegance and flexible architecture are forecast to emerge into prime vehicle attributes that will drive market gains in the future. The new generation of commercial vehicles manufactured in the upcoming years will be increasingly equipped with telematics designed to support the provision of value added Transport Information and Control Systems (TICS) services, such as, traffic and travel information (Pre-trip information, On-trip driver information, Personal information services, Route guidance and navigation etc), Traffic management (Transportation planning support, Traffic control, Incident management, Policing/enforcing traffic regulations, etc), Emergency management (Hazardous materials and incident notification, Emergency notification and personal security, etc) Electronic payment, among others. Growing demand for commercial vehicle on-board safety monitoring, commercial vehicle fleet management, commercial vehicle pre-clearance, will especially drive up demand for CV telematics.
While the automotive industry is steadily recovering the world over, supported by resurgence in new vehicle purchases, increase in vehicle miles traveled, fleet size expansion and replacements of aging vehicle fleets, the industry in Europe is running into fresh set of challenges. The industry in the region currently continues to vacillate between optimism and fear, marring sentiments in an otherwise recovering market. Macro themes affecting Europe include the prolonging of the sovereign debt crisis as a result of the half-measures implemented till date in attempts to stave off the crisis, a dysfunctional financial system that is fuelling a slow-motion economic collapse and fears over reduced consumer spending and slower economic growth as a result of austerity measures. Nervous over the play out of the sovereign debt crisis drama, the domestic auto industry is facing immediate hurdles, such as, credit restriction, consumer indecisiveness, fears of slowing vehicle sales, high labor costs, and possible collapse of consumer confidence in the event of escalation in the severity of the debt crisis. For instance, with banks in Europe voicing intentions of capping exposure to vehicle loans to reduce commercial and consumer debt loads, automakers and dealers are already coming under pressure to finance sales of new vehicles. The heat raised by the Euro debt crisis in the auto industry in the EU is reflected by the growing concerns voiced by auto majors like Ford, General Motors, Fiat, over the volatile and fluctuating profits being recorded in the region.
At the extreme pessimistic end of the spectrum, bearish market sentiments indicate that multiple defaults by debt ridden economies could trigger a collapse of the Euro as a common currency. The return to local currency, although currently not seen as likely, can spell doom pushing the automobile industry into a complete meltdown like the one witnessed during the 2007-2009 recession. While no easy and immediate solutions exist for Europe’s macroeconomic imbalances, current economic data leaves room for hope. For instance, Germany’s relative resilience in handling the euro zone crisis is helping strengthen confidence levels. Given the yet encouraging outlook for the German economy, the largest in the euro zone, it is not all gloom and doom as pessimists might view. Encouraging economic data such as comparatively lower levels of unemployment, better trade surplus accounts, and stable industrial output and manufacturing indices, indicate that the real German economy has not yet been impacted by the crisis as feared.
Market sentiments are additionally strengthened by the fact that the sovereign debt crisis has not yet been transmitted to the real economy as is indicated by the relative stability of the value of the Euro currency. The intrinsic value of the euro has been stable despite fears of massive inflation, and the Euro continues to remain the dominant world currency in comparison to the dollar. Also, fears over possible implementation of austerity measures dragging down consumer spending is also temporarily being allayed. Although the Greek government under the leadership of Lucas Papademos, voiced intentions of implementing fiscal austerity packages to reduce the country’s widening deficits, similar measures are currently not seen as likely in relatively stronger economies with lower debt loads like in Germany and Italy. A key reason why an overly hasty stand on spending cuts is not seen as likely is the growing acceptance of the counterproductive implications of such a strategy. For instance, spending cuts can curtail GDP growth and further reduce revenues and weaken the government’s ability to repay its debts while simultaneously resulting in larger fiscal deficits accumulating into higher public debts.
Against this backdrop, capital investments in commercial vehicles are expected to hold up in the year 2012. Immediate production cutbacks in the region are not seen as likely, given the yet patchy slowdown in auto sales. For instance, there continues to exist pockets of strength in regions, such as in Germany and the UK alongside the quarterly weakness witnessed in France, Spain and Portugal. The odds are in favor of the automobile industry given the current guarded optimism over the government’s latest attempts to rein in the debt crisis, which in effect discounts the impact of a possible Eurozone crisis, which is still not confirmed as a technical recession. Also, the 2007-2009 recession inspired adoption of leaner inventory holding strategies and restructured cost bases, and shrewd expansion into developing countries to minimize risk exposure in domestic markets, now has the automotive industry in the region better equipped to weather a possible Eurozone slowdown. Nevertheless, auto makers in the region remain concerned and are continuing to lobby for a quicker intervention of the European leaders in resolving the debt crisis. Currently, however production continues to hold up even in the face of weaker than expected growth and optimism remains with no downgrade in the outlook for auto production. Although short-termed, concerns of the automobile industry are currently alleviated with news about the governments in EU legislating additional bailouts which in effect kicks the EU debt can further down the road. Although these short-term measures do not provide a permanent solution to the crisis and in reality indicates deferring of conclusive, corrective action, market sentiments are nevertheless encouraged.
As stated by the new market research report on Commercial Vehicles, United States and Asia-Pacific remain two of the largest markets worldwide. Asia-Pacific is forecast to emerge into the fastest growing market, trailing a projected CAGR of 6.5% over the analysis period 2009 through 2017.
Major players in the marketplace include AB Volvo Group, UD Trucks Corporation, Chrysler Group LLC, Daimler AG, Fiat Industrial S.p.A., Ford Motor Company, General Motors Corp., Hino Motors Ltd., Honda Motor Co Ltd., Hyundai Motor Company, Isuzu Motors Ltd., Iveco, MAN Truck & Bus AG, Mitsubishi Fuso Truck and Bus Corporation, Navistar International Corporation, Nissan Motor Co Ltd., PACCAR Inc., Scania AB, Tata Motors Ltd., Toyota Motor Corp., Volkswagen AG, among others.
The research report titled “Commercial Vehicles: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides sales and production figures (In Thousand Units) for major geographic markets including the United States, Canada, Japan, Europe (France, Germany, Italy, Spain, The UK, Russia, and Rest of Europe), Asia-Pacific (Australia, China, India, Indonesia, Malaysia, South Korea, Taiwan, Thailand, and Rest of Asia-Pacific), Latin America (Argentina, Brazil, Mexico, and Rest of Latin America), and Rest of World. Product segments analyzed include Light Commercial Vehicles (LCV), Medium/Heavy Commercial Vehicle (MCV), Trucks, and Buses (as applicable in respective regional markets).
For more details about this comprehensive market research report, please visit –
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.
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