The Indian commercial vehicle market is experiencing changes due to heavy regulatory winds, changes in customer preferences, segment shifts, increasing adoption of technology, and digitalization. The government’s aspirational economic growth targets, a growing population, consumer commodity spending, infrastructure developments, overall manufacturing growth, and agricultural output will be reflected in the future performance of Indian commercial vehicles. India is facing major imminent shift of emission from BS-IV to BS-VI from April 2020.
BS-VI is an outflow standard that will bring truly necessary changes in the Indian vehicle industry in terms of toxin emanations. The upcoming BS-VI standard incorporates a wide rundown of innovation adjustments in the engine, the most noteworthy being making On-board Diagnostics (OBD) mandatory for all vehicles. The revised axle load regulation that was announced in July 2018 with immediate effect, increases the vehicle’s permissible operating GVW capacity by approximately 12% to 15%. This resulted in nationwide faster freight transportation.
The major implication for trucks emanating from GST is the consolidation of widespread small-to-medium storage yards to regionally centralized large warehouse facilities for hub-to-hub transportation. This has resulted in an increased demand for high GVW vehicles. The truck body code defines the standards for bodybuilding to significantly improve the quality of vehicles applicable for both OEMs and local bodybuilders. The vehicle scrappage policy, which proposes voluntary scrappage of old vehicles under an incentive scheme, is unlikely. The Ministry of Road Transport & Highways has clear set a regulatory roadmap, with a focus on quality, safety, efficiency, and environment.
Awareness of technology and realization of long-term Total Cost of Ownership (TCO) benefits drive the customer to invest in value-added features, moving away from the traditional price-based buying approach. Indian OEMs are heavily investing in Research and Development (R&D) for performance enhancement features to withstand tough competition from foreign OEMs.
In order to survive the current turbulence in the industry, Indian commercial vehicle OEMs will have to focus on value trucks by targeting the right set of customers and business models. The rising confluence of technologies in the industry provides a platform for various stakeholders to offer service solution based operating models such as trucks as a service. Commercial vehicle electrification in India, although very nascent, is expected to gain traction after 2025, with initial adoption of electrification in the LCV segment and will rapidly extend to MCV and HCV segments.
The aim of this study is to understand the emerging market and technology trends shaping the Indian commercial vehicle industry, estimate the outlook for 2020, and forecast the industry volumes till 2025 by assessing the impact of current and upcoming regulations and norms.
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