On the up and up

September 17, 2021

Frost & Sullivan’s recent analysis finds that the commercial vehicle industry is on track to recovery as worldwide economic activities resume.

The market research and analysis business consulting firm of Frost & Sullivan notes that the shipment of global light commercial vehicles (LCVs) is estimated to reach 12,6 million units in 2021 (from 11,4 units in 2020) – a 10,3% year-on-year (YoY) growth.

The medium and heavy-duty (M&HD) trucks segment is projected to reach 3,4 million units in 2021, up from 3,2 million units last year, an uptick at 5,9% YoY growth. The exponential growth of e-commerce and last-mile delivery is pushing the demand for LCVs, while the resumption of freight movement at ports and the revival of construction activities are accelerating the sales of M&HD trucks globally.

“The commercial vehicle industry is expected to undergo significant transformation in the next two to five years, boosted by the entry of tech-savvy start-ups leveraging big data and artificial intelligence (AI) to introduce solutions such as telematics, advanced safety systems and digital freight brokerage platforms,” says Marshall Martin, commercial mobility team leader at Frost & Sullivan.

“This will encourage original equipment manufacturers, suppliers and start-ups in the ecosystem to collaborate and develop future technologies, which are vital to developing greener trucks that are not only technologically feasible but also financially viable.”

In addition, battery manufacturing is poised to play a key role, he says, given the tremendous increase in demand for Li-ion batteries. “The biggest opportunities lie in battery and fuel cell technologies that ensure cleaner and sustainable commercial mobility.”

The global market research store ResearchAndMarkets.com emphasises that the innovation doesn’t stop there. “Traton and Navistar have joined hands at an overall
strategic level; Daimler-Volvo and GM-Nikola have come together to develop fuel-cell trucking; Waymo-Daimler and TuSimple-ZF have partnered to develop autonomous trucking.”

But it hasn’t been smooth sailing all the way, as Frost & Sullivan notes in “Global Light, and Medium and Heavy Commercial Vehicles Outlook, 2021”. “The trucking industry was not immune to the disruptions in supply chain and falling trade that the global Covid-19 pandemic created. Major markets, such as North America and Latin America, were badly hit, while Europe and India suffered the steepest sales declines. China was the only region to register positive growth across both LCVs and M&HD truck segments in 2020.”

Being the first major region to be hit by Covid-19, China bounced back the quickest, by Q2 of 2020, as it was able to largely control the spread of the disease through strict measures. Besides, the strong support from the government helped the Chinese trucking industry achieve unusually high growth.

Other key regional insights include:

North America: The pandemic has accelerated the adoption of digital technologies such as data analytics for fleet management and digital freight brokerage solutions for freight matching.

Latin America: The region is embracing electrification faster than expected, driven by the initiatives taken by local authorities to set up a conducive electric vehicle ecosystem in the region.

Europe: Start-ups have emerged in recent years, presenting investment opportunities to fuel rapid growth and nurture innovation to gain a competitive advantage.

India: The adoption of telematics among the larger fleets is accelerating to ensure efficient asset management.

Covid-19, with all the negativity and heartbreak that it has brought, has fortunately expedited a number of trends that were already slowly taking shape before the pandemic hit.

It is heartening that the global commercial vehicle market is on the up and up, as e-commerce is booming, construction activities are accelerating and the global movement of freight is returning to normal.

German quality with American power

Daimler Truck AG and US-based global power leader and engine manufacturer Cummins have announced that they will enter into a global strategic partnership for medium-duty engines. The details of the agreement have been established and the framework agreement has been signed by both companies.

Under the strategic partnership, Cummins will invest in the further development of the medium-duty engine platform and its global production and delivery starting in the second half of the decade for Daimler Trucks and Buses. Daimler Truck AG will no longer invest its funds in the further development of its medium-duty engines for the Euro VII emissions standard.

“We are very pleased that we were able to conclude the negotiations for a framework agreement with Cummins so quickly. The cooperation makes engine production at the Mannheim location ready for the future and strengthens our competitiveness at the same time,” says Martin Daum, chairman of the board of management at Daimler Truck AG and a member of the board of management at Daimler AG. “We will develop joint solutions, always keeping the interests of our customers, employees and the company in mind.”

Tom Linebarger, chairman and CEO of Cummins, adds: “We are pleased to sign this agreement as we move forward in collaboration to provide the medium duty engine systems for Daimler Trucks and Buses in global markets. Our partnership is a terrific opportunity for both companies to be more competitive, drive global innovation, expand offerings to customers and reduce emissions. We are looking forward to working with Daimler on this and exploring other potential opportunities to grow our respective companies.”

Daimler Truck AG and Cummins will help maintain jobs at the Mannheim location in Germany. Cummins will use its existing footprint, strong production and supply chain networks in other regions to contribute to Daimler Trucks’ brands, including those of Daimler Trucks North America. Cummins has continued to grow its presence and footprint across Europe as it expands its product portfolio, ranging from advanced diesel, natural gas, electrified power, hybrids and hydrogen fuel cell powertrains.

As part of their partnership, Daimler Truck AG and Cummins will continue to evaluate additional opportunities for cooperation.