Indian Light Commercial Vehicle Sales Set To Reach More Than 1.2 Million Units By 2018
22 Feb 2013 • by Natalie Aster
Light commercial vehicle (LCV) is the official term used for a commercial carrier vehicle weighing up to 3.5 tons. The LCV concept was initially created as a compact truck and is usually optimized to be ruggedly built, have low operating costs and powerful yet fuel efficient engine, and to be utilized for intra-city operations. The LCV market includes all light commercial vehicles & trucks (LCVs & LCTs) and light buses and coaches (LBCs), including pick-ups and vans, but excluding sports utility and similar vehicles.
According to ‘India LCV Market Assessment & Future Opportunities 2008-2018’, a recent focused study published by Tech Archival, the Indian LCV market is mostly dominated by the light commercial trucks which accounted for almost 90% of Indian LCV sales volume in 2012, while the light buses & coaches segment accounted for a remaining 10% share. The market shored up between the four year period from 2008 and 2012, reaching a total value of more than US$ 5 Billion by 2012. Tata Motors and Mahindra & Mahindra are two leading players that controlled about 90 % of the market share in 2012. Other significant players in the market are SML Isuzu and Ashok Leyland that are strategically planning their resources to snatch a larger pie of Indian LCV market.
‘The strong market demand in Indian LCV market has been favoured especially due to LCV’s light weight, convenient costs and ability to go to the last mile. Moreover, India still lacks an efficient nationwide network of broad highways that can connect every village and town to big cities. For that reason, LCVs have been highly competent for Indian market to serve the purpose of goods delivery from urban to rural areas’ said Manmohan Joshi, Research Director at Tech Archival.
Due to economic revival, increasing public & private spending on infrastructure and higher penetration of financing facilities, it is anticipated that LCV market will continue its tremendous growth right through 2018. However, the strong market growth in the Indian LCV market will make it attractive to potential new players. Companies with parallel operations including manufacturers of mini trucks, pickup trucks, cargo trucks etc. may diversify into LCV segment to enter this profitable market which increases threat of new entrants and the degree of rivalry’ added Manmohan Joshi. Maruti Suzuki, India's largest car manufacturer is also actively analyzing its options to launch a small LCV truck as the company has recently developed a two cylinder 800 cc diesel engine.
Tech Archival further estimates that Indian LCV sales volumes will continue growing at a CAGR of more than 16% right through 2018, reaching more than 1.2 Million units to meet the soaring market demand.