Businesses worldwide rely on a robust fleet of light, medium, and heavy commercial vehicles to meet their logistics and transportation demands. In 2024 alone, over 12.3 million such vehicles are in operation, highlighting the sector’s critical role in global supply chains.
For a deep dive into the dynamic world of commercial vehicles, click here to access Frost & Sullivan’s latest growth opportunity analysis on the subject.
Although 2022 presented challenges for commercial original equipment manufacturers (OEMs) in the aftermath of COVID-19, the landscape has shifted since 2023. High-growth regions such as China are advancing in the light commercial vehicles (LCV) and medium & heavy-duty (M&HD) truck segments, revolutionizing the automotive landscape in regions like Latin America and the Association of Southeast Asian Nations (ASEAN).
Additionally, the increasing adoption of electric vehicle (EV) technology is propelling the ecosystem forward, promoting modularity and platformization across vehicle segments, weight classes, and geographies. However, growth obstacles remain, including slower economic growth in 2024 compared to 2023, high interest rates, rising inflation, and geopolitical tensions in Ukraine and the Middle East.
To stay ahead in this evolving landscape, proactive industry players are identifying key strategic imperatives to shape effective growth strategies for long-term success. Read on to explore the top nine imperatives driving the future of the commercial vehicle industry.
How is your organization leveraging these strategic imperatives to maximize its competitive success in the commercial vehicles ecosystem?
Transformative Megatrends
- Harnessing CASE Mobility: Connected, autonomous, shared, and electric (CASE) innovations are revolutionizing commercial fleets, enhancing sustainability, and enabling customer-friendly in-vehicle features. While connected and shared technologies in telematics and digital freight brokerage are still in their early stages, they are already gaining popularity among customers.
- Adopting Circular Economy Supply Chains: The push for a circular economy in vehicle manufacturing and maintenance is gaining momentum. Industry players are emphasizing the recycling and reuse of vehicle parts, leveraging green manufacturing methods, and minimizing costs, especially as companies shift to electrification and strive to meet environmental, social, and governance (ESG) objectives.
Industry Convergence
- Integrating Commercial Vehicles with Urban Infrastructure: With the rise of smart cities, OEMs are collaborating with governments, urban planners, and infrastructure companies to integrate their vehicles into traffic and safety management systems. This convergence not only enhances efficiency but also reduces accidents, improving overall urban mobility.
- Forging Strategic Alliances: In an ecosystem defined by a rising demand for commercial vehicles that support connectivity, electric powertrains, and automation, collaborations among OEMs, Tier-I suppliers, and technology companies are proving essential. However, these partnerships come with emission and safety challenges, prompting organizations to develop secure, cost-effective, and compliant solutions to mitigate risks.
Are you building a comprehensive growth strategy that capitalizes on key strategic imperatives to secure success?
Competitive Intensity
- Embracing the Rise of Startups: Traditionally dominated by legacy companies resistant to change, the trucking industry is now attracting disruptive startups. These players are enriching automobiles with advanced technologies like artificial intelligence (AI) machine learning (ML) and telematics, prompting legacy companies to seek their support and strategic partnership.
- Technology Companies Vying for a Piece of the Pie: Technology companies, including industry giants, are entering the trucking world, offering capabilities such as connectivity, freight brokerage, and autonomous technologies. Amid this shift, more customers are opting for these features, pushing ecosystem incumbents to either adopt novel technologies or develop their own.
Disruptive Technologies
- Standardizing Factory Fitment of Telematics Devices: OEMs are beginning to implement telematics devices in the M&HCV segments, enabling connectivity and creating networks of connected vehicles to gather actionable data. This step towards truck digitization is expected to lead to all North American and European models featuring factory-fit telematics in the coming years.
Innovative Business Models
- Deploying Autonomous Fleets for Commercial Transport Services: Logistics companies are adopting self-driving trucks to reduce costs and improve safety. This shift is revolutionizing supply chain dynamics, eliminating human roles for simplistic tasks that can be automated and lead to a more automation-reliant business model.
- Implementing Feature-on-Demand (FoD): Today’s tech-savvy customers are seeking maximum value from their vehicles, driving companies to implement an FoD business model. This approach is generating more revenue than regular subscriptions and allowing customers to access in-vehicle software or mobile apps to purchase desired solutions and features.
In conclusion, the commercial vehicle industry is awakening to the potential of disruptive technologies and CASE mobility, setting the tone for the automotive domain for years to come. Legacy players are revamping, technology companies are entering the fray, developing economies are becoming ground-zero for OEMs expanding their presence, and sustainability is becoming a crucial factor. Companies that successfully navigate these challenges will position themselves at the forefront of this competitive landscape. Additionally, their agility to adapt to shifting megatrends and geopolitical dynamics will be the difference between success and failure.
With these imperatives as your guide, which key growth opportunities will you seize to propel your growth journey?
If you’re unsure where to begin, Frost & Sullivan’s team of growth experts is on hand to assist you in tackling and overcoming the challenges posed by the strategic imperatives highlighted earlier, while identifying fresh growth prospects for your organization.
