Mumbai: The Indian small and light commercial vehicle segment, which is one of the fastest growing segments in the country is expected to more than double by 2015-16 and grow at 18.5% compounded annual growth rate for the next five years, according to research report published by leading research agency Frost & Sullivan called 'Strategic Assesment of Small and Light Commercial Vehicles Market in India.'
The small and light commercial vehicle segment which stood at 3,53,620 units in 2010-11, Frost & Sullivan says will touch 8,27,920 units by 2015-16. SCV goods carrier is expected to account for around 70 per cent of this volume.
The research report says, economic changes in India have fuelled growth in the commercial vehicle market and other factors have helped skew the market in favour of small and light commercial vehicle. These segments have just entered its rapid growth phase and they are expected to continue growing in the next 5-10 years.
The Indian CV market is polarizing towards the small and light CV segments with the market share of medium CVs (MCVs) declining. This trend is intensified by many factors. For instance, the restriction on medium and heavy CVs' entrance into metro cities has made it necessary for logistics companies to procure SCVs and LCVs for within-city delivery of goods. Availability of low cost LCVs with high power and gross vehicle weight (GVW) capacities has also eaten the market share of MCVs.
However, the entrance of global CV majors into the Indian market through joint ventures with local majors is expected to make it very competitive, with many new and better products hitting the market. Nonetheless, local majors like Tata Motors Ltd (TML), Ashok Leyland (AL) and Mahindra & Mahindra (M&M) will continue to dominate the market due to their widespread network in India and increasing acquisitions abroad.
"As competition increases, it is important to strategically position products as early in their lifecycle as possible to capitalize on the market trends," said Frost & Sullivan Automotive Research Analyst. "Inflation caused by polarization and de-regulation of fuel prices, among other factors, has a direct impact on earnings of the organization."
Manufacturing in India is a key strength, especially for low cost trucks, which can generate a good business opportunity in growing global markets such as Mexico, Brazil, Africa and China. Domestic companies can attract high volumes as these products provide similar configurations at lower costs, noted the report.
"Designing the right product to be placed strategically in the market is critical for the long-term growth of the OEMs," concluded the Analyst. "The best combination of product and partner will ensure technological superiority a better market share of the OEM."
1 comment:
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