Frost & Sullivan: Commercial Vehicles 2020 Vision Market Insight

2020 Vision: Global Medium-Heavy Commercial Truck Market

Green, Safe, and Connected Trucks to Drive Freight Mobility Improvements and Industry Revenues

Sandeep Kar

Global Director

Automotive & Transportation

Frost & Sullivan

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Market Overview

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Top 5 Predictions and Trends

Key Predictions-2022

• Global medium-heavy truck sales to 4.6 million; 70 % higher than 2013 sales.

• Over 40 Percent of all medium-heavy trucks manufactured globally will feature platform based

lineage

• Sales of CNG/LNG and hybrid/electric enabled trucks to account for over 500,000 units

• BRIC, Next 11, and Rest of World Market to Provide 80 Percent of Sales Growth Volume;

TRIAD markets to offer the rest 20 Percent growth momentum

• Competition between Daimler and Volvo to intensify as both aim for deeper and wider penetration in

BRIC, Next 11, and RoW markets. Collective market share to reach 23 Percent of global market

Key Trends

• NG to Emerge as a Key Fuel of Future: NG to be most sought after advanced powertrain technology. Global NG penetration to reach 8.5 % by 2022

• Low-cost to Best-cost: Low cost truck platform development will become a must for OEMs to stay competitive as global industry centers shift from NA-EU to BRIC and beyond

• Beyond BRIC: Focus to shift beyond BRIC, Next 11, Africa and Other markets to emerge new battle field for Global OEMs

• Platforms for Profits: Developing global platforms and increasing segment/ regional sharing of sub-systems will drive sustained profits in the long term

• Smart is New Green: Supply chain optimization will drive fleets and clients in improving overall efficiency of operations stoking demand for safe, connected and intelligent truck systems

Source:, Frost & Sullivan analysis.

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2012 t

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2020 CV Industry Senior Management Top-of-Mind Issues By 2020 Senior

Leaders at Truck OEMs and Tier-1 Companies Will Look at Advanced Technologies for Solution to Myriad

Operational Issues

0

1

2

3

4

5

Last frontiers ofglobalization- Next

11, Africa

2.Regulationcompliancepressures

3.Globalmanufacturing and

sourcing shifts

4.Rapid proliferationof electronics

5.Urban logistics,bricks-and-clicks,and multi-modality

6. Autonomousdriven connected

trucks

7. Service andmaintenance

revenue focusedbusiness models

8. New truck types(e.g. mega-trucks,

city trucks, etc.) andpricing models

• Penetration and sales growth

focus will shift to Next-11 and

Africa markets while developed

and BRIC markets will drive

margin growth. This will also bring

tectonic shifts in manufacturing

and sourcing footprints

• Advanced technologies such as

autonomous driving, telematics,

connected safety systems, and

driver related technologies that

deliver health, wellness, and

well-being will offer margin

growth opportunities

Note: Data collected from 2013-2014 interviews and discussions with Sr. Manager to CEO

level executives of truck OEMs and tier-1 suppliers in NA, EU, APAC, China, India, Latin

America and other regions Source: Frost & Sullivan analysis.

Global CV 2020 Vision: Senior Executive Top of Mind

Issues, Global, 2020

• New freight routes, and massive

proliferation of urban logistics

will lead to introduction of new

truck types, platforms, and also

higher levels of multi-modality

• Urban logistics and multi-

modality is influencing product

development

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0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

NorthAmerica

SouthAmerica

China India Russia Europe Next 11 RoW

MCV HCV

2013

2022 Regional Shares

85.1 %

Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.

Global CV 2020 Vision: Unit Shipments—Global: 2013–2022

2022

~2.7

million

~4.6

million

5.9% CAGR Growth

44%

31%

24%

42%

21%

21%

45%

53%

34%

36%

64%

55% 69%

76%

58% 72% 79% 55%

47%

66%

Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, Vietnam, and Bangladesh.

Un

its

MCV: 6T to 16T

HCV: 16T and above

Global Medium and Heavy Truck Market Forecast: Despite short-term global headwinds, stabilizing BRIC markets and rising Next 11 and African

markets to elevate global MCV and HCV sales to 4.6 Million by 2022

28%

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0 200,000 400,000 600,000 800,000 1,000,0001,200,0001,400,000

RoW

Next 11

Europe

Russia

India

China

SA

NA

2022 2013

CAGR Growth (%)

Global CV Vision 2020: Heavy Duty Truck Unit Shipment Forecast for Key Markets—Global:

2013–2022 Units

Global Heavy Truck Market—Unit Shipments Forecast by Region: Russia

and Next 11 To Experience Double-Digit Growth in Heavy Truck Sales Through the Forecast

Period; China and India to Move Through Volatile Period Recovering Higher Rates Beyond 2015


Next 11 markets to perform the best

among the global markets.

Russia to be the best performing BRIC

market. Demand from neighboring CIS and

East European countries to improve truck

output.

Indian HCV market to be back on a

growth track with improving infra

spending and a recovering economic

situation.

3.3

4.9

5.5

14.1

10.5

5.1

9.8

8.0

Brazilian economic recovery coupled with

Latam economic progress to influence truck

demand in the region. Heavy duty segment

to benefit in the region.

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North America

South America

China

India

Russia

Europe

Next 11 RoW

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

5000 10000 15000 20000 25000 30000 35000

GVWR (kilogram)

Pri

ce

($

)

Global CV Vision 2020: Highest-selling Weight Segment in Each Region—Global: 2022

Size of the bubble: Sales units of top segments in each country in 2022.

Attractive Segment by Region—2022 The 22 to 27 MT Segment to Emerge as Most Attractive Among Trucks Globally at a Price Band

of $45,000 to $75,000


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Expected Number of Global Platforms Available, 2012-2015

Vehicle Platform Strategies of Key Global HD OEMs: Outlook for 2022 Participants with Global Platform Portfolio, Strong Presence in Growth Markets, and Regional

Branding Expected to Sustain Profits Globally

Source: Frost & Sullivan analysis.

0

1

2

3

4

5

6

7

8

9

10

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Daimler

Group

Volvo

Group

MAN SE

Scania

AB

PACCAR Inc.

Dongfeng

Motor

Corp.

Beiqi

Foton Navistar

Inc.

IVECO

Ashok

Leyland

Clear global strategy,

strong product mix Global strategy evolving,

strong regional products

Size of bubble represents expected production volume attributable to platform-based HD truck models by 2018

TATA Motors

Profitable,

only at

regional level

Sought-after

zone

Sustained

profits,

globally

Ove

rall

Glo

ba

l P

res

en

ce In

de

x

CNHTC

Global CV Vision 2020 : HD OEM Outlook Comparative Analysis—Global: 2013-2022

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Region

CV Technologies

Natural Gas Hybrid-Electric Engine

Downsizing

Low Cost

Truck

Safety

Systems Telematics

Infotainment

and HMI

North America

South America

Europe

Russia

China

India

Strong Trend Towards 2022 Moderate Trend Towards 2022 Market in 2012

Global CV 2020 Vision: Top CV Technologies Outlook—Global: 2013–2022

Top CV Technologies- Global Outlook: OEMs to Increasingly Focus on Advanced Powertrain, Safety, Telematics, and Cabin Systems for

Diversified Leadership Across Segments and Geographies

NA

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Health Wellness & Wellbeing

- Key for driver retention and recruitment

Current Willingness to Pay a Premium by Fleets

Safety Systems

Driver-Fleet Preference in Soft Technologies Driver Retention and Recruitment will Become Important for Fleets; OEMs Providing Trucks with

HWW Features at Competitive Price will Gain Market Share.

Fleet Preference Medium High

Med

ium

Connectivity

&

Telematics

Driver

Safety

Vehicle &

Cargo

Safety

Comfort &

Ergonomics Entertainment &

Storage Space

HMI

Fuel

Efficiency

Driving

Assistance

System

Dri

ve

r P

refe

ren

ce

Hig

h

Global CV Vision 2020: Fleet Preference- Cabin Technologies, NA-EU, 2012

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Fleet Operator

Cloud

OEM Component

Suppliers

Independent

Telematics Vendor

Data

Aggregation

Management

Wireless

Provider

Billing

Engine

Mobile

Phone

Note: FMS = fleet management Systems


Dealer

Network or

Leasing

Company

OE

M t

o F

lee

t O

wn

er

Ind

ep

en

de

nt

Ve

nd

or

to F

lee

t o

wn

er

OEM through Independent Vendor to Fleet Owner (e.g., IVECO through Qualcomm)

Te

lec

om

Off

eri

ng

F

MS

D

ire

ctl

y

(e.g

., V

eri

zo

n W

ire

les

s;

usin

g

Xo

ra)

Current solution Future solution Information flow Key:

Commercial Vehicle Telematics Ecosystem Many real-time information providers for services such as tolling, secured route, and parking

spots, are likely to join the ecosystem by 2020.

Global CV Vision 2020: FMS Value Chain, NA-EU, 2012-2022

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R.O.I. and Initial Acquisition Cost

Driver Acceptance

Technology Interface Integration

Liability

Regulation

Effectiveness of Technology


Global MCV-HCV Truck Safety Systems Adoption Hot Spots ABS, ESC, and Active Braking Technologies to Gain BRIC and Next 11 Adoption; While Mature

Markets (e.g. NA, EU, etc.) to Increasingly Adopt Telematics Based Integrated Safety Systems

Global CV Vision 2022: Safety Technology Hot Spots: 2013-2022

Expected Key Decision

Factors for Safety

Technology Selection

ABS

Stability control systems

Tire Pressure Monitoring

Vision Based Systems

Integrated Safety System

Telematics Enabled Safety

NA

SA

Europe

Russia

China

India

Africa

Next 11 RoW

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2

3

4

5

1

Daimler and Volvo will intensify competition in global markets, with both experiencing success

through value priced truck market exposure. Chinese, Indian, and Korean OEMs will benefit from

growth in demand from Next 11 and African economies.

Platform-based MCV and HCV production are set to receive major boosts, with OEMs’ building and

executing capacity aimed at generating nearly 34 percent of total production of MCVs and HCVs

from platforms by 2018. Focus will be on making trucks cheaply, and not on making cheap trucks.

Diesel to continue remaining the dominant fuel for medium-heavy duty trucks globally, with 86.3

Percent of the total fuel mix in 2022. Natural gas (CNG/LNG) will experience rapid market share

gain reaching 8.5 Percent and hybrid/electric will proliferate 3.8 Percent of total medium-heavy duty

trucks sold in 2022.

Connectivity, down time reduction, health wellness and wellbeing, safety, data analytics, form-factor

reduction, and fuel efficiency enhancement while ensuring emission reduction will be the key

technology focal points of truck OEMs and tier-1 suppliers. This implies that data analytics and

advanced technologies will drive most revenue opportunities in the medium-heavy duty commercial

vehicle market globally, regardless of point of origin or point of application.

Global sales of medium-heavy trucks are expected to grow at 5.9 percent to reach 4.6 million

Units by 2022. BRIC markets to account for over 60 percent of global truck sales. China, North

America and India to feature as top 3 markets for medium-heavy trucks globally.

Key Conclusions: Advanced Technologies to Drive Margin Growth Opportunities While

Developing Market Focused Products to Drive Sales Growth Opportunities for Market

Participants

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Email:

[email protected]

Contact Us To Find Out More

Sandeep Kar

Global Director- Automotive &

Transportation

+1.416.490.7796

Email: [email protected]

mailto:[email protected]

mailto:[email protected]