Fuel Costs and Telematics to Drive Seismic Changes in MD and HD Vehicle Market
A new research report just out on the medium duty (MD) and heavy duty (HD) vehicle markets projects dramatic shifts in market growth and composition, fueled by changes in demand fundamentals, new environmental regulations and the increased pace of technological developments.
As a consequence, the authors, Commodity Inside, note that “demand for commercial vehicles will see some structural changes affecting the proportion of medium and heavy vehicles in the market. Moreover, fleet management will experience see some significant changes which would have direct implications on operations and costs.”
“In the short-run,” a summary pointed out, “demand for medium and heavy commercial vehicles in North America, Europe and Asia is expected to drive the global sales. Infrastructure investments, industrialization, and increasing logistic activities particularly in Asia will be some major drivers behind the growth.”
No surprisingly, the researchers point to dramatic shifts in telematics solutions, which will open new areas of growth and development in the commercial vehicle market. It stated: “The growing influence of technology in the automotive industry has opened new revenue streams for OEMs and aftermarket providers, though at the same time appealing new entrants. For instance, Goodyear, which is a tire and rubber company, is now looking to penetrate in the telematics market by developing a predictive platform-based business model.”
Commodity Inside automotive analyst Sergej Gavrilov writes “We believe that increasing demand for vehicles tracking and fuel efficiency in combination with growing cost pressure will push fleet operators to use telematics. Furthermore, roads and safety regulations will also drive demand for telematics in commercial fleets. We understand that the increased demand for wireless connectivity creates new opportunities not only for OEMs but the whole commercial vehicles ecosystem.”
Stringent fuel economy and emissions regulations will continue to drive the light vehicle strategy and result in demand for more lightweight materials.
Commodity Inside anticipates that the weight of an average heavy commercial vehicle will reduce approximately 8% over the next ten years. With the decline in vehicle weight, the materials mix in medium and heavy commercial vehicles will also change. Steel will continue to remain its dominance in the commercial vehicle sector, though will lose some share to alternative materials such as aluminum, plastic and composites.
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