Truck sales to be subdued in North America and Europe even as emerging markets like ASEAN and Latin America bounce back.
By Marshall Martin, Program Manager – Mobility
In 2023, both China and Europe saw notable growth in light commercial vehicle (LCV) and medium and heavy-duty (M&HD) truck sales, driven by a low installed base. However, emerging markets struggled, with LCV sales contracting significantly in key regions like India and ASEAN, and M&HD truck sales plummeting in Latin America. Chinese OEMs rebounded strongly, with a surge in domestic sales and expanding international presence, particularly in Latin America and ASEAN, where they displaced their European and Japanese competitors. Chinese OEMs accounted for nearly one-third of global truck sales in 2023, up from one-fourth the previous year.
In 2024, advanced markets such as North America and Europe are projected to experience a decline in truck sales due to excess capacity and a sluggish freight sector. Conversely, emerging markets like ASEAN and Latin America are expected to rebound robustly, driven by stronger economic fundamentals.
To learn more, please access: Global Light, Medium, and Heavy Commercial Vehicle Outlook, 2024, , Growth Opportunities in the North American Hydrogen Infrastructure Market for Trucks and Global Fuel Cell Trucks Growth Opportunities, or contact sathyanarayanak@frost.com for information on a private briefing.
eCommerce, Customization, and Micromobility Trends in the LCV Market
Several trends are set to shape the global LCV market in 2024 and beyond. These include the rise of eCommerce, increasing customization of light delivery vehicles, disruption from micromobility alternatives like eBikes and eTrikes, adoption of modular and flexible vehicle designs, establishment of Urban Clean Air Zones (CAZs) and Low Emission Zones (LEZs), and the integration of advanced safety systems.
Global LCV growth is projected to reach 2.6% in 2024, underpinned by marginal growth in India, North America, and Europe, and significant volume rebounds in ASEAN and Latin America. The pickup segment is expected to remain strong, with increasing volumes in ASEAN, Latin America, and Europe, while vans may lose some market share to eBikes and eTrikes due to rising demand for last-mile delivery solutions.
Ford, Stellantis, and GM continue to dominate the global LCV market, collectively accounting for 37.8% of sales in 2023. China and Europe are poised to remain major contributors to the growth of electric LCVs (eLCVs), making up more than three-fourths of global sales in 2024. Emerging markets like India and Latin America are expected to see gradual adoption of eLCVs in the short to medium term.
Reshoring, Emission Norms, and New Energy Vehicles Trends in the M&HD Truck Market
The M&HD truck market is influenced by several key dynamics, including an emphasis on reshoring and nearshoring, realignment of OEMs to create more robust supply chains, persistent labor and driver shortages, and the move toward stricter emission norms for heavy-duty vehicles. Advancements in natural gas and hydrogen internal combustion engine (ICE) trucks are also notable. However, rising trade conflicts and geopolitical tensions present challenges for market participants.
A strong recovery in China is expected to drive global M&HD truck volume growth to 3.8% in 2024, despite anticipated contractions in North America and Europe. Medium-duty (MD) trucks are expected to grow faster than heavy-duty (HD) trucks in most regions, except China and India, where some volume may shift from MD trucks to LCVs and HD trucks. Western OEMs like Daimler Truck, Volvo, and Traton will maintain their dominance, accounting for nearly 37.8% of the market in 2023. China will continue to lead in new energy truck sales (natural gas and electric), contributing to 85% of global sales in 2024.
Looking to 2024
Truck sales in 2024 will be impacted by economic slowdown, high interest rates, and rising inflation, especially in the first half of the year. The volatile political climate, marked by ongoing conflicts in the Middle East and the Russia-Ukraine situation, will exacerbate uncertainties.
Increasing economic protectionism will heighten trade tensions. The European Commission’s anti-subsidy investigations into Chinese EVs and the United States’ concerns about data security from Chinese OEMs will likely bolster the China+1 strategy, potentially benefiting regions like India and ASEAN.
Developed markets such as North America and Europe are expected to see significant declines in truck sales due to excess capacity and weak freight demand. In contrast, emerging markets like ASEAN and Latin America are projected to recover robustly, driven by stronger economic fundamentals.
Stricter emissions norms and increased incentives for EVs and alternative fuels will gain momentum in regions like China, India, and ASEAN. The adoption of natural gas trucks will grow, particularly in China and India, given the expected marginal increase in natural gas prices in 2024. Interest in hydrogen-powered trucks is also increasing, with several companies accelerating the development of hydrogen ICEs.
Our Perspective
The global proliferation of EV technology is steering the commercial vehicle industry towards greater modularity and platformization, supporting higher flexibility while allowing customers to customize vehicles to specific needs.
OEMs and suppliers must collaborate to create flexible platforms suitable for different vehicle types. Integrated solutions in motor and transmission units, battery management systems, and wheel-end solutions that can be shared across models and vehicle classes will be essential. Fleets value such flexibility, and a more collaborative approach from OEMs will be crucial in meeting these needs.
Meanwhile, recent cutbacks in EV investments due to lower consumer interest and higher raw material prices may boost the prospects of alternative ICE vehicles. These vehicles, running on natural gas and hydrogen, require minimal modifications and offer good value. They can be fueled at existing stations without significant infrastructure changes.
OEMs and engine suppliers have a bit more leeway to continue operating ICE vehicles with cleaner fuels. Incremental investments in these technologies are marginal compared to those required for EVs. Transitioning to alternative ICE systems is easier and more attractive to fleets in the short-to-medium term, before EVs become more financially viable.
Global supply chains have been in flux, prompting companies to reassess established supply chains through nearshoring and reshoring initiatives to reduce external dependencies. OEMs and suppliers in advanced regions like North America and Europe are building domestic capabilities to avoid delays and uncertainties, while revitalizing local economies.
With inputs from Amrita Shetty, Senior Manager – Communications & Content, Mobility
