Commercial vehicles have become an integral part of modern business operations across industries. From transportation and logistics to infrastructure development, commercial vehicles play a pivotal role in facilitating the movement of goods, materials, and services. In recent years, the commercial vehicles market in India has witnessed tremendous growth, thereby emerging as one of the major contributors to the country's economic progress.
Market Size and Growth
The commercial vehicles market in India stood at over 3.5 million units in 2019 and has been growing at a steady pace of around 10% annually. Various estimates project the commercial vehicles market to reach over 5 million units by 2025, indicating immense opportunities for automakers. Trucks, buses, and light commercial vehicles are the major segments contributing to this growth. Improving infrastructure, rising e-commerce, and bulk transportation needs of key industries have driven demand.
Foreign automakers as well as domestic majors like Tata Motors, Mahindra & Mahindra, Ashok Leyland, Eicher Motors are catering to this growing space through continuous product innovation, expansion of dealership networks, and strategic partnerships. Financing availability from banks and NBFCs has also increased commercial vehicle purchases. Original Equipment Manufacturers (OEMs) are going all out with localized manufacturing to gain scale as well as derive cost benefits.
Role in Infrastructure Development
Massive investments in infrastructure projects across sectors like roads, highways, urbanization, railways have accelerated commercial vehicle sales in recent years. Earth moving equipment, tipper trucks, cranes, payloaders, excavators see strong offtake from infrastructure companies, cement plants, mining operations and port trusts. As the nation aims to invest over $1 trillion in infrastructure by 2025 under the National Infrastructure Pipeline (NIP), commercial vehicles are vital in transporting construction materials, equipment and manpower. Various state road development corporations and central public works departments depend on commercial fleets for their projects.
EVs Offer Promise
Rising pollution levels and stricter emission norms have prompted auto OEMs to ramp up electric vehicles (EVs) development. Commercial fleet electrification is one of the priorities given their operational usage patterns. Trucks, buses and light vehicles that ply on fixed routes are well suited for EV technology. Several pilot projects involving e-trucks, e-buses for intra-city transportation have yielded encouraging results. Total cost of ownership over the lifecycle is lower vis-à-vis diesel alternatives. Favorable policies around EV infrastructure, GST rates, acquisition subsidies are attracting fleet operators to gradually switch to greener fuels. Major cities have rolled out plans for fully electric public transport by 2030 which will certainly boost electric commercial vehicle sales. OEMs are readying their portfolios and identifying customers in material handling, last-mile delivery too.
Logistics Sector Dependence
Housing over 50 million square feet of warehousing infrastructure, India's 3PL logistics market is projected to reach $265 billion by 2025. Growing e-commerce, pharmaceuticals, fast moving consumer goods sectors have expedited requirements for transportation fleets. Medium and heavy commercial vehicles constitute a large chunk of logistic companies' assets deployed for time-bound movement of cargo. Temperature-controlled vehicles for agri-produce, medicines are other relevant segments. As logistics parks and dedicated freight corridors take shape across Tier I and II cities, commercial vehicle investments will gather momentum to cater shifting cargo volumes. With cold chain and roll-on-roll-off facilities ramping up too, different body types and specialized trucks will be in demand.
New Revenue Models
Fleet ownership remains cost intensive owing to high acquisition and operational expenses. Hence, Commercial Vehicles operators are exploring affordable alternative models like leasing, renting and shared mobility on an asset-light approach. Several fleet management companies have entered the field offering vehicles on a pay-per-use basis with maintenance, insurance, driver facilitation. This subscription model is gaining traction as it eases cash flows and operations. Vehicle and asset tracking aided by telematics systems enhances fleet productivity and uptime too. Ride-hailing platforms are tying up with fleet owners and aggregating under-utilized commercial assets for optimized pricing. Over time, such innovative business structures will help expand market accessibility.
Road Ahead
Given the critical role commercial fleets play in our developing economy, sustained policy support is the need of the hour. Revising tax structures, interest rates, scrappage incentives will encourage fleet replacement and adoption of cleaner technologies. Infrastructure status for logistics parks will facilitate investments and ancillary development. Skilling programs for commercial drivers ensure safety compliance. Standardization of processes, systems across states aids transportation ease. With industrialization gathering pace, commercial vehicle sales have ample headroom for growth in coming years. Stringent fuel economy and emission norms will force upgrades to alternate energy sources as well. It is certain that commercial vehicles will steer progress across industries as the backbone of mobility and efficient logistics.
The commercial vehicles market has emerged as a key driver propelling India's economic aspirations, and automakers are innovating rapidly to serve the evolving mobility requirements. The multi-trillion dollar National Infrastructure Pipeline together with policy reforms supporting alternate fuel adoption, new business models and fleet electrification present significant opportunities ahead. Commercial fleets will remain indispensable for timely transportation of goods, materials and workforce vital for infrastructure projects, industry development, and service delivery across sectors.
For more insights, read- Commercial Vehicles
Check more trending articles related to this topic: Protein Sequencing Market
