COMMERCIAL VEHICLE MARKET IN EUROPE
The European Commercial Vehicle market has been a key driver for majority of investments in research and development and fuels major trades contributing to 6.9% of European GDP.
It will play a key role in helping Europe increase its GDP by 2030. The commercial vehicle market in Europe supports 12.2 million jobs, out of which 3 million jobs are high skilled jobs in manufacturing and production sector.
EUROPE COMMERCIAL VEHICLE MARKET DYNAMICS
The major factors bringing about this growth is the rise in logistics due to e-commerce, onset of pandemic and ride sharing platforms. Another major factor driving the market is sustainable mobility and innovation as a result of tax incentives on electric vehicles and CO2 taxation. More than 55.6% of the total patents filled in the automotive sector was from Europe which quantifies into 9,541 patents
PUSH FOR ELECTRICFICATION
The European Commission is reviewing the CO2 emission standards for new cars and vans, and proposing further reductions. It recently launched its Fit for 55 Package. This package, which includes a review of the CO2 standards for cars as well as the Alternative Fuel Infrastructure Directive, is of crucial importance to the automotive sector as it gears up for the transition to zero-emission mobility.
Therefore, auto industry’s investments in alternatively-powered vehicles are paying off: In 2020 more than one in 10 cars registered in the EU were electrically chargeable.
COVID IMPACT ON EUROPE COMMERCIAL VEHICLE MARKET
The global pandemic of COVID 19 has caused disruption on the minutest fronts and the pre-COVID world is really obsolete. Major sectors of the European commercial vehicle market experienced their lowest fall since World War 2. This is a rare upheaval and is driven by health and safety concerns along with economic turbulence.
COVID 19 catalysed the automotive industry slowdown and amplified the challenges projected by new technology and mobility trends. Spain and Italy were the most affected by this trend in the European market as they were also most severely hit by the pandemic.
COVID 19 disrupted the entire automotive value chain with almost resonant sales and production decline. Spain experienced highest sales drop while UK as well as France was most hit on the production front. European production of commercial vehicles is expected to witness a decrease of 28% to 35% owing to the shutdown of plants and supply chain.
To placate and tranquilize the effects of the global pandemic of COVID-19 as well as to establish the new normal successfully, a thorough action plan has to be implemented. For the recovery period, the continuous functioning of both the manufacturing as well as retail operations is very essential.
Along with this a complete change in the value proposition has to be carried out. To free the suppliers from the stress caused by the compromised liquidity position, the supply chain visibility has to be improved. Priority should be given to the most critical suppliers by evaluating their risks and liquidity position and their productivity capacity should be enhanced.
Other resources should be chalked out in the European market to support these critical distressed suppliers. Post COVID 19, the dealership network is expected to dwindle by 6 % in next three years. So the commercial vehicle’s OEM’s need to perform risk assessment for dealership based on short term market trends and find investors at risk.
A network amalgamation process to aid the preservation of the critical mass of dealership is essential. It is extremely essential to identify the expectations of the customers from the commercial vehicle market and to coherently modify the value proposition and customize it to their needs.
2021- FIRST 5 MONTHS UPDATE
The disruptions caused by the pandemic restrictions is now getting summoned by the gains in the EU Commercial vehicle market, the market witnesses a hope as the demands for commercial vehicle increases by 43.9% in first 5 months of 2021. All four major EU markets improved their overall results along with their increase in demands for HCV, MHCV, MHBC (Medium & Heavy Buses & Coaches) which accelerated by 40.1%, 34.7% and 18.1% respectively.
The market share of battery electric vehicles more than doubled – from 3.5% in the second quarter of 2020 to 7.5% this year.
Hybrid electric vehicles (HEVs) remained the largest category of alternatively-powered cars in volume terms. EU markets along with the four major ones recorded two or even three-digit percentage gains during this period. Hybrid registrations tripled from April to June, up 213.5% compared to one year ago.
In 2020, the CV sales in Europe shrank by 19.4% from 2.63M units to 2.21M units. Every one of the 27 EU markets have recorded twofold digit rate drops for the year.
Major Markets like France, Germany, Italy witnessed lesser drop in sales compared to other markets. UK saw a 22% drop in CV sales in 2020.
Interest for light business vehicles dropped by 18% in 2020. Denmark, Germany and Belgium were the major markets where the drop was lesser compared to other markets.
Germany, the biggest market for medium and weighty business vehicles over 3.5 tons, saw registrations in this portion tumble by 26% in 2020. Italy was one of the very few major markets where the sales were down by only 13.1% for the entire year.
commercial vehicle registrations in the European Union have declined by 28.2% for the initial eight months of 2020, as per most recent figures delivered today by the European Automobile Manufacturers Association (ACEA).
Every one of the 27 EU markets have recorded twofold digit rate drops for the year up until now. Shoots of recuperation were alluded to in July, when a negligible drop of 0.9% was recorded across all business vehicle fragments with development in Italy, Spain and France, yet request in August dropped by 18%.
August’s figures show that registrations in Spain have plunged by 23%, in Germany by 22.7% and France by 3.1%, while Italy developed by 2.6%.
Interest for light business vehicles dropped by 18.6% in August. Figures were helped by a 4.1% expansion in Italy, yet hit by 24.4% and 22.2% compressions in Spain and Germany individually. France, the biggest van market in the EU, enlisted a 2.1% drop for the month.
Germany, the biggest market for medium and weighty business vehicles over 3.5 tons, saw registrations in this portion tumble by 26% in August. Italy recorded a 20.6% development, adding to a general decay of 11.9%.
Registrations of substantial commercial vehicles of 16 tons and over dropped by 11.7% in August. Spain (2.2%) and Italy (19.4%) recorded development, yet Germany encountered a huge drop of 29%. From January to August end, interest for this class has dropped by 37.9% contrasted with 2019’s figures.
August was additionally a helpless month for enrollments of new medium and heavy duty vehicles over 3.5 tons. Following development of 18.1% for July, August saw numbers fall by 26.7%. registrations more than split in Italy, dropping by 63.4%, while Spain (34%), France (23.9%) and Germany (5.3%) recorded drop.
EUROPE COMMERCIAL VEHICLE MARKET SIZE AND FORECAST
The market draws a trade of €92 billion by estimated sale of 6.6 million vehicles and a tax revenue of €384.6 billion. The European Commercial Vehicle market accounts for 19% of the total motor vehicles and 23% of passenger cars manufactured in the world.
The Road transport is the baron ruling the European Commercial Vehicle market and accounts for 46.5% of all transport related jobs. The light commercial vehicle market comprising of vans and trucks are likely to grow with a CAGR of 6% during the forecast period till 2025.
RECENT PRODUCT DEVELOPMENT IN EUROPE COMMERCIAL VEHICLE MARKET
- The Volvo Penta-powered RT features two electric motors that have the potential to provide a total output of up to 360 kW (490 HP) and up to 50,000 Nm for all wheels. The RT’s electric driveline, paired with independent suspension and a hydropneumatic chassis, delivers a high standard of safety and great driving performance.
- The three leading commercial vehicle manufacturers Volvo Group, Daimler Truck and the TRATON GROUP have signed a non-binding agreement to install and operate a high-performance public charging network for battery electric heavy-duty long-haul trucks and coaches across Europe.
- With an investment of 350 million Euros, the Mercedes-Benz Vans division is accelerating its electrification strategy and pursuing leadership in electric drive by fast-tracking development of its new Electric Versatility Platform for the large van segment. This innovative e-drive platform will underpin the next generation of eSprinter, a product that will aim for best-in-class performance.
- Daimler sets the course for sustainable mobility and is taking the next step towards “Ambition 2039” climate-neutral mobility. For the first time Mercedes Benz sources battery cells from carbon neutral production, which says that there would be more than 30% savings on carbon footprint of the entire battery for future models.
- Daimler will extend its portfolio with three new models in 2021. The EQC with an electric range of 445 – 471 km according to NEDC. The EQV in which electricity is supplied by the water-cooled lithium-ion battery with a usable capacity of 90 kWh fully charged, the EQV has a range of 418kilometers. The EQA with an energy content of 66.5 kWh. which will be available in Germany at prices from 47,540.50 Euros.
The commercial vehicles are manufactured in Europe Volvo group, Renault, Daimler, Volkswagen, PSA Peugeot Citroen, DAF and Iveco.
Based on the current terrain, Daimler will continue to be the number one truck manufacturer.