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2020 Vision: Global Medium2020 Vision: Global Medium--Heavy Commercial Heavy Commercial Truck MarketTruck Market
Smart, Green, and Connected Trucks to Drive Freight Mobility Smart, Green, and Connected Trucks to Drive Freight Mobility Improvements, and Industry RevenuesImprovements, and Industry Revenues
Global Director - Commercial Vehicle Research, Frost & Sullivan
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10 years of global commercial vehicle technologies and markets expertise, which
include particular focus on areas such as:
- Global commercial truck industry growth opportunities, and market penetration
and growth strategy development
- Advanced truck technologies- powertrain, chassis, safety, telematics and
regulation compliance technologies
- Global research and consulting management, global business development
and team-building, CXO level revenue and market share growth strategy
development
Top Commercial Vehicle Industry Mega TrendsWhat can this mean for CV Industry?
BRICs, Next 11, Africa ����Shift in Demand & Center of Gravity
New Freight Routes����New/Different Trucks
Connectivity ���� Beyond MRM
URBANIZATION����
POLARIZATION
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Digitalization ���� The Box is Changing
High Speed Rail ����Multi-modality
Health, Wellness, Wellbeing ����New Focal Points
POLARIZATION
Source: Frost & Sullivan analysis.
Global Logistics Spending—Urban vs. Non-urbanUrban logistics spending is expected to reach $5.98 trillion by 2020, accounting for 46% of total logistics spending. Share of outsourced logistics will also rise in all regional markets.
2011 2020
In-house
Outsourced
In-house
Outsourced
Urban Logistics Spending, Global, 2011 and 2020
$5.9570%
$1.6665%
$0.8935%
$2.5530%
$7.0254%
$2.9950%
$2.9950%
$5.9846%
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Urban Non-urbanNote: Dollar amounts are in trillions
33%
55%
31%
39%
0%
10%
20%
30%
40%
50%
60%
% o
f Lo
gist
ics
Ou
tso
urc
ed
North America
Europe
Asia-Pacific
Latin America
Outsourced Logistics, Key Regions, 2012-2014
Source: Frost & Sullivan analysis.
New Business Models in LogisticsNew Business Models Point Towards Changes in Commercial Vehicle Design and Operating Cycles
Examples of Logistics Service Providers Experimenting with New Logistics Models
Global GDP and Commercial Truck Market Growth Outlook: Growth in BRIC and Next 11 economies will offer strength to global truck demand. Developed economies to start offering momentum from 2015 onwards.
RegionGDP Growth
Estimates: 2012-2022 (%)
MCV Growth (CAGR%)
HCV Growth (CAGR%)
Overall CV Growth
(CAGR%)
Market Opportunity
North America
2.1-2.5 4.3 3.6 3.9 Moderate
South America
4–5 4.4 5.7 5.3 Moderate-High
Europe 1.0–1.5 4.2 3.8 3.9 Moderate
Global CV Vision 2020: World GDP and CV Growth Outlook—Global: 2012-2022
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China 6.5–7.0 2.9 5.4 4.7 Moderate-High
India 6.0–7.0 4.4 7.0 5.9 Moderate-High
Russia 3.5–4 10.3 8.4 8.9 High
Next 11 5–6 7.1 9.2 8.2 High
RoW 4–5 8.4 8.2 8.3 High
Global 4–4.5 5.1 5.7 5.5 Moderate-High
Source: OECD, Frost & Sullivan analysis.
300
350
105.0
• Truck cycle peaks occur every 4th/5th year• Truck cycle peaks precede industrial
production peak by a year• This correlation suggests that the next truck
cycle peak could be in 2014 - 2015 followed by an potential economic upturn in 2016
Truck Buying Cycles vis a vis Economic CyclesNew and used truck sales expected to peak in 2014 – 2015 resulting in an oversupply of used trucks over the 2015 – 2016 period
Strong Economy • Robust economic activity• Class 8 growth exceeded
overall truck growth sales during much of the 1990s reaching its peak in 1999
Ind
ustr
ial P
rod
ucti
on
In
dex (
2007=
100)
Class 8 Used Truck Market: Correlation Between Truck Buying Cycle and Industrial Growth, United States, 1998 - 2016
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50
100
150
200
250
55.0
65.0
75.0
85.0
95.0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
US Annual Industrial Production Index US Class 8 Actual Units Sold Used Class 8 Estimated Units Sold Source: Frost and Sullivan; US Federal Reserve
No replacement• Increase in replacement cycle to 5 – 6
years• Slowdown of economy• Tremendous demand for used trucks
Pent-up demand• Growth in US manufacturing and
industrial production• Pent-up replacement demand• Short supply of MY ‘08 and ‘09
used trucksInd
ustr
ial P
rod
ucti
on
In
dex (
2007=
100)
Un
its S
old
(000s)
Global Medium and Heavy Truck Market Forecast:Despite short-term global headwinds, stabilizing BRIC markets and rising Next 11 and African markets to elevate global MCV and HCV sales to 4.7 Million by 2022
2022 Regional Shares
Global CV 2020 Vision: Unit Shipments—Global: 2012–2022
~2.7 million
~4.6 million
5.5% CAGR Growth
24%
34%
36%
Un
its
8
Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.
44%
31%
42% 21%
45%
53%64%
55%69%
76%
58%72%
79%55% 47%
66%
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, Vietnam, and Bangladesh.
Un
its
MCV: 6T to 16T
HCV: 16T and above
28%
Growth Market Focus—Next 11 Markets Indonesia, Turkey, and Mexico Offer Strong
Growth Potential Through the Forecast Period, as these Economies Experience Rapid Economic Development, Leading to Freight Movement Expansion
10.4%
6.6% 11.5%
Global CV Vision 2020: Unit Sales Forecast—Next 11: 2012-2022
Un
it S
ale
s
Indonesia is set to experience doubling of truck demand by 2018. Rapid urbanization will drive the market for commercial vehicles.
Mexican CV demand set to triple over the 2011 to 2018 period. Economic growth and rise in construction activity, coupled with need for replacement of aging fleet vehicles, is driving growth.
Turkey’s fast modernizing economy will establish the country as a critical center for production and sales of trucks.
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Note: All figures are rounded; the base year is 2012. Bangladesh data is not present, owing to
lack of availability at the time of publication of this study. Source: Frost & Sullivan analysis.
Un
it S
ale
s
African Medium and Heavy Truck Market Forecast: South Africa, Algeria and Nigeria to Lead African Truck Market; Low-cost Product Line, CKD Assembly and After Sales Support are Key Entry Strategies for OEM
2022 Country Shares
Global CV Vision 2020: Unit Sales Forecast—Africa: 2012–2022
~84,000
~152,0006.2% YoY Growth
66%
64%
Un
it S
ale
s
10
Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.
53%
51%
66%
41%
74%
66%73%
68%
62%
38%47%
49%59% 26% 34% 27%
31%
36%
The category of Others includes Botswana, Namibia, Zambia, Zimbabwe, Angola, Mozambique, and the rest of Africa.
34%
Pri
ce (
$)
Global CV Vision 2020: Highest-selling Weight Segment in Each Region—Global: 2022
Attractive Segment by Region—2022 The 22 to 27 MT Segment to Emerge as Most Attractive Among Trucks Globally at a Price Band of $45,000 to $75,000
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GVWR (kilogram)
Pri
ce (
$)
Size of the bubble: Sales units of top segments in each country in 2022. Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.
Vehicle Platform Strategies of Key Global HD OEMs: By 2020, 29 Global HD Truck Platforms are Expected, with Individual Regional Products Built with up to 70% Localized Components
58 57
29
OEMs whose global strategy was in early stages of execution in 2012 are expected to show more pronounced, platform-based product development as they expand geographically.
Nu
mb
er
of
Pla
tfo
rms (
Un
its)
Global CV Vision 2020 : Heavy-duty Truck Market: Key Truck Platforms—Global: 2012 and 2022
12
2429
Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.
Nu
mb
er
of
Pla
tfo
rms (
Un
its)
Year
Note: Within the split Auman GTL, and MAN SITRAK platforms are accounted to both individual OEMs involved, but are counted only once for computing the total.
Low-cost Truck Market (Global): Over 21 key global low-cost MCV-HCV model ranges
are expected to be introduced by global OEMs by 2016; Low-cost trucks dominating markets such as Africa, Next 11 where Chinese and Indian OEMs are finding sweet spots
HCV
2009 2016
14
MN 25/40
U-Truck
Sinotruk HowoDaimler Bharat Benz
IVECO LC HCV
Sinotruk HuangHeHyundai HD
DongFeng DFL
GAZ-FAW HD
2013
Kamaz LCT HD
VolvoDongFeng LCT HD
Global CV Vision 2020: Low-cost Truck Model Timeline—Global: 2009–2016
13
MCV
21813
7
Source: Frost & Sullivan analysis
TATA PrimaAsiaMotorWorksMAN Force
Volvo-Eicher VE
DongFeng Duo
IVECO’s Chinese Platform Based MD
Daimler Brand X MD
GAZ 3309c
Fuso FG LCTISUZU FTR
Top CV Technologies- Global Outlook: OEMs to Increasingly Focus on Advanced Powertrain, Safety, Telematics, and Cabin Systems for Diversified Leadership Across Segments and Geographies
Region
CV Technologies
Natural Gas Hybrid-ElectricEngine
DownsizingLow Cost
TruckSafety
SystemsTelematics
Infotainment and HMI
North America
South America
Global CV 2020 Vision: Top CV Technologies Outlook—Global: 2012–2022
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Europe
Russia
China
India
Strong Trend Towards 2022 Moderate Trend Towards 2022Market in 2012 NA Source: Frost & Sullivan analysis.
Global MCV and HCV Market—Powertrain Technology ForecastChina and NA to Show Greater Preference Towards Advanced Powertrain Systems; NG to Emerge as Fastest Growing Powertrain Technology Across Regions
Global CV Vision 2020: Powertrain Technology Split by Region—Global: 2022
Pe
rce
nta
ge
15
Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, Vietnam, and
Bangladesh.
Pe
rce
nta
ge
Smart Connected Trucks :Rising Importance of Supply Chain Optimization Will Drive Fleets’ Clients and Hence Fleets Towards Greater
Connectivity Stoking Telematics Adoption for Urban Freight Mobility
Mobile Resource Management
Security/Safety ManagementTrack and Trace, HAZMAT, Geofencing, Stolen Vehicle
Geofencing, Telematics Based Fuel Consumption Optimization, Green Routing, Electronic Toll Collection, Real-time Parking
Fuel OptimizationFuel POI Tracking, Charging Station/Battery Swap Facility
Location, Fuel-Tax Filing
Vehicle Uptime Maximization
Remote Diagnostics, Prognostics
Source: Frost & Sullivan analysis.
Telematics FMS Opportunities by Country: Growing Demand in North America,
Europe, Russia, Brazil, and South Africa; Middle East, APAC, Certain Next 11 Countries and India Projected to Show High Degree of Adoption Beyond 2015.
1
2
3
6 7
Potential Countries
Qualcomm, Microlise, FleetBoard, Dynafleet, Tom Tom, Masternaut, Transics,
Telematics, Ashok Leyland, Trimble, iTrack, MobiApp, and
others
Common Multiplexed Architecture Across OEMs Laying Out a Common Advanced
Electrical and Electronics Platform Will Provide Clear Boundaries for Integration of Electronics in Cabins; This Will Emerge as a Key Foundation for Future Cabin Design Strategies
Need for Robust, Effective and Efficient Electronics, Communication and Networking Architecture
Infotainment
Regulation Compliance
Telematics Connectivity
Safety System Integration
Development of architecture in compliance with SAE
Enables seamless communication between vehicle and devices
Single standardized platform will streamline product
Global CV Vision 2020: Common Multiplexed Architecture, NA-EU, 2012-2020
18
OBD
OBD – On-Board Diagnostics; HVAC – Heating Ventilating and Air-Conditioning
HMI – Driver Comfort & Convenience Controls
Handheld / Personal Device Connectivity
HVAC
Powertrain Control
Chassis Control
compliance with SAE standards.
J1939, J1708, CAN, LIN etc - vehicle bus protocol used for communication and diagnostics among vehicle components
MULTIPLEXED
ARCHITECTURE
product development for OEMs and Teir1 suppliers
Since, necessary infrastructure is available, new devices addition will not require discrete system integration and customization
IEC 60068,ISO 16750
Source: Frost & Sullivan analysis.
Global MCV-HCV Truck Safety Systems Adoption Hot SpotsABS, ESC, and Active Braking Technologies to Gain BRIC and Next 11 Adoption; While Mature Markets (e.g. NA, EU, etc.) to Increasingly Adopt Telematics Based Integrated Safety Systems
R.O.I. and Initial Acquisition CostR.O.I. and Initial Acquisition Cost
Driver Driver
Effectiveness of TechnologyEffectiveness of Technology
R.O.I. and Initial Acquisition Cost
Driver
Effectiveness of Technology
Global CV Vision 2022: Safety Technology Hot Spots: 2012-2022
Expected Key Decision Factors for Safety
Technology Selection
NA
Europe
Russia
China
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Driver AcceptanceDriver Acceptance
Technology Interface Integration
Technology Interface Integration
LiabilityLiability
RegulationRegulation
Driver Acceptance
Technology Interface Integration
Liability
Regulation
Source: Frost & Sullivan analysis.
ABS
Stability control systems
Tire Pressure Monitoring
Vision Based Systems
Integrated Safety System
Telematics Enabled Safety
SA
India
Africa
Next 11 RoW
Top 5 Predictions and Trends
Key Predictions- 2012-2022
• Global medium-heavy truck sales to 4.6 million; 70 % higher than 2012 sales.
• Over 40 Percent of all medium-heavy trucks manufactured globally will feature platform based lineage
20
• Sales of CNG/LNG and hybrid/electric enabled trucks to account for over 500,000 units
• BRIC, Next 11, Africa, and Rest of World Market to Provide 75 Percent of Sales Growth Volume;
TRIAD markets to offer the rest 25Percent growth momentum
• Competition between Daimler and Volvo to intensify as both aim for deeper and wider penetration in
BRIC, Next 11, and RoW markets. Collective market share to reach 23 Percent of global market
Source:, Frost & Sullivan analysis.
Top 5 Predictions and Trends (..contd.)
Key Trends- 2012-2022
• NG to Emerge as a Key Fuel of Future: NG to be most sought after advanced powertrain technology.
Global NG penetration to reach 8.5 % by 2022
• Low-cost to Best-cost: Low cost truck platform development will become a must for OEMs to stay
competitive as global industry centers shift from NA-EU to BRIC and beyond
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• Beyond BRIC: Focus to shift beyond BRIC, Next 11, Africa and Other markets to emerge new battle
field for Global OEMs
• Platforms for Profits: Developing global platforms and increasing segment/ regional sharing of sub-
systems will drive sustained profits in the long term
• Smart is New Green: Supply chain optimization will drive fleets and clients in improving overall
efficiency of operations stoking demand for safe, connected and intelligent truck systems
Market Engineering Methodology
One of Frost & Sullivan’s core deliverables
is its Market Engineering studies. They
are based on our proprietary Market
Engineering Methodology. This approach,
developed across 50 years of experience
assessing global markets, applies
engineering rigor to the often nebulous art
of market forecasting and interpretation.
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of market forecasting and interpretation.
A detailed description of the methodology
can be found here.
Source: Frost & Sullivan research.
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