Global ex­pan­sion

Business World - - SPECIAL FEATURE -

AC­CORD­ING TO the Ger­man As­so­ci­a­tion of the Au­to­mo­tive In­dus­try, or Ver­band der Au­to­mo­bilin­dus­trie ( VDA), the global com­mer­cial ve­hi­cle mar­ket ex­panded mod­estly in 2016. A to­tal of 2.9 mil­lion trucks were sold that year, up by 6% from 2015.

“The most suc­cess­ful mar­kets were China and Western Europe, both with dou­ble- digit growth rates. By con­trast, busi­ness con­tracted sig­nif­i­cantly in the US and Brazil, as ex­pected. This means that the global truck mar­ket again grew strongly in 2016, the year of the IAA Com­mer­cial Ve­hi­cles. The ro­bust devel­op­ment in Western Europe is es­pe­cially wel­come – on a par­tic­u­larly im­por­tant mar­ket for the Ger­man man­u­fac­tur­ers. In 2017 the world­wide com­mer­cial ve­hi­cle mar­ket will at least equal last year’s level, and pos­si­bly slightly ex­ceed it,” said Matthias Wiss­man, pres­i­dent of the VDA, in a state­ment.

China ac­counted for roughly onethird of the all the new heavy com­mer­cial ve­hi­cles sold in 2016. Sales in the coun­try moved up 28% to 962,000 units. The Chi­nese mar­ket recorded year on year rises of 72% in Novem­ber and 38% in De­cem­ber of last year. VDA said that the growth of the com­mer­cial ve­hi­cle mar­ket in China might slow down to 3% in 2017.

In Western Europe, the mar­ket for heavy com­mer­cial ve­hi­cles ex­pe­ri­enced an 11% in­crease in sales to 287,300 ve­hi­cles last year, the high­est num­ber since 2008. Dou­ble- digit in­creases were recorded in Italy, France and Spain. In UK, in spite of the Brexit vote, reg­is­tra­tions rose 6%.

Af­ter six years of growth, the truck mar­ket in US suf­fered a re­verse. VDA noted that sales were down by 11% to 400,400 units, and that this year, the mar­ket there might bear an­other loss, though not as large as last year’s.

New reg­is­tra­tions of heavy trucks in Brazil, mean­while, dropped 31% to 47,000 ve­hi­cles. The mar­ket in the coun­try had al­ready shrunk to half its size in the prior year.

“Brazil, a mar­ket that ac­tu­ally has great po­ten­tial, is there­fore still a cause for con­cern in the in­ter­na­tional truck busi­ness. It now re­mains to be seen whether the mar­ket will con­sol­i­date. De­spite jus­ti­fied skep­ti­cism, if Brazil gets back on track this year, it could make big strides. That is shown by the volatil­ity of the mar­ket that over the last ten years has al­ways ei­ther in­creased or de­creased at dou­ble- digit rates,” Mr. Wiss­man said.

In­dia man­aged to con­clude 2016 with a 7% rise in heavy truck vol­ume, which to­taled 298,600 units. VDA said the mar­ket in the coun­try might grew 5% this year, top­ping the 300,000 mark.

Mean­while, ac­cord­ing to “Global Small Com­mer­cial Ve­hi­cle Mar­ket By Ve­hi­cle Type, By Re­gion, Com­pe­ti­tion Fore­cast & Op­por­tu­ni­ties, 2011-2021” by the tech­nol­ogy com­pany Re­portLinker, the global mar­ket of small com­mer­cial ve­hi­cles will reach $ 820 bil­lion come 2021.

“Gov­ern­ment ini­tia­tives in dif­fer­ent coun­tries [are] pro­jected to en­hance de­mand for small com­mer­cial ve­hi­cles over the next five years. As small com­mer­cia l ve­hi­cles are com­par­a­tively more fuel ef­fi­cient and have

bet­ter out­reach in terms of lo­ca­tion, de­mand for small com­mer­cial ve­hi­cles across the globe is ex­pected to in­crease dur­ing the fore­cast pe­riod,” the firm said in a state­ment.

It added that in 2015, of all re­gions, North Amer­ica was lead­ing in terms of gen­er­at­ing de­mand, and it might main­tain such a po­si­tion over the course of the next five years.

Across the globe, a ma­jor fac­tor in the grow­ing de­mand for small com­mer­cial ve­hi­cles is the in­creas­ing num­ber of small and medium- sized en­ter­prises.

“SME in­dus­try pri­mar­ily re­quires small com­mer­cial ve­hi­cles for in­ter­city trans­porta­tion of goods and raw ma­te­ri­als. Ris­ing de­mand for small com­mer­cial ve­hi­cles across the globe can be at­trib­uted to grow­ing de­mand for trans­porta­tion of prod­ucts be­ing man­u­fac­tured by small and medi­um­scale in­dus­tries,” Re­portLinker said.

“Apart from grow­ing num­ber of small- scale busi­nesses, con­stantly de­vel­op­ing lo­gis­tics in­dus­try across var­i­ous coun­tries is also driv­ing de­mand for small com­mer­cial ve­hi­cles glob­ally. In­creased de­mand for in­ter­city and in­tracity trans­porta­tion of goods and peo­ple is fur­ther ex­pected to aid growth in the global small com­mer­cial ve­hi­cle mar­ket dur­ing the fore­cast pe­riod.”

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