Global commercial vehicle sales tipped to soar


Analysts foresee 21 million units sold in 2015

By Rob McKay | February 16, 2011

Commercial vehicle manufactures should start picking themselves off the floor as the global economy begins to gather pace, a Global Industry Analysts (GIA) market report summary released yesterday contends.

Among other inputs, economic stimulus programs, recovery in GDP, such government incentives as scrappage schemes, steady improvement in logistics and transportation, "have and will continue to drive the industry’s recovery", analysts for US firm GIA say.

They believe commercial vehicle sales worldwide will rise to 21 million units by 2015.

According to International Organisation of Motor Vehicle Manufacturers (OICA) figures, the number of heavy trucks built fell 19.2 percent from 3,736,561 to 3,020,113 between 2008 and 2009. The figures for light truck were 13,688,038 and 10,426,781 respectively - a fall of 23.8 percent.

A KPMG report last year said commercial vehicle sales had fallen 30 percent in Europe, 38 percent in Japan and 37 percent in the US in 2009. Only China and India had recorded rises, of 30 percent and 5 percent respectively.

Unsurprisingly, GIA’s Commercial Vehicles: A Global Strategic Business Report identifies China in particular and Asia in general as the focus of the heaviest likely growth.

"Post-recession, [the] market for commercial vehicles flaunt the potential to wax at a robust rate in Asia, due to stronger economic growth, encouraging pace of industrialisation, development of road infrastructure, and the yet wide scope for expansion of commercial vehicle fleet," the summary says.

"Sales of medium and heavy commercial vehicles in China are expected to surge at a CAGR (compound annual growth rate) of 17% during the analysis period."

More broadly, it focuses on what GIA analysts sees as the drivers for demand recovery.

"Growth will be encouraged by the resurgence in fundamental macroeconomic growth drivers," they say.

"While production cuts, continuous trimming of manufacturing capacities, and elimination of value added features to produce low-cost vehicles, have all been popular short-term strategies to cope with the recession, future strategies to emerge above the turbulence will essentially be skewed towards focus on green cars, and next generation automotive technologies.

"In the immediate short-term, the burden of overcapacity is expected to ease as demand recovers, and sales of new vehicles increases drying up the inventories in the supply chain. Stronger levels of demand recovery in the developed markets will help ease current overcapacity issues.

"Replenishing of depleting inventories in the supply chain in the post recession period, as a result of resurging production activities on wings of improving vehicle demand will require stronger communication chain between the consumer, dealer and the manufacturer, to ensure field inventories are carefully tracked to maintain supply and demand balance."

GIA’s $5,000 report is available at:

http://www.strategyr.com/Commercial_Vehicles_Market_Report.asp

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