Roland Berger: Small Commercial vehicle market booming

17 September 2014 2 min. read
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According to a new research from Roland Berger, the small commercial vehicles (SCV) segment in India will in the coming years boom, accounting for ˜80% of the total market for commercial vehicles by 2020.

The Indian practice of Roland Berger, a global strategy consulting firm, recently conducted a market assessment on India's commercial vehicles (CV) market. The key findings and developments have been published in the report ‘Small commercial vehicle – India's little elephant’.

Small commercial vehicles in India
The report reveals that the SCV segment, a relatively new segment in India’s commercial vehicle industry, has seen a rapid growth over the past years (+30% between 2010 and 2012), turning it into the largest segment in terms of volume. In addition, the segment has proven less prone to the ailing crisis in the industry - its growth rate between FY12 and FY14 declined by a CAGR* of 'only' 1%, compared to the 11% for the overall industry. Currently, the SCV segment has a volume turnover of approximately 432,000 units. “The SCV segment has outperformed all the other commercial vehicles segments and now accounts for more than 60% of the industry,” says Wilfried Aulbur, Managing Partner at Roland Berger India and one of the authors of the report.

Commercial vehicle industry market evolution

For the coming years, the outlook for the SCV segment is positive, forecast the consultants. They expect the segment to grow with a CAGR of 13% until 2020, with the share between passenger and cargo SCV vehicle's expected to remain stable. As a result of the double-digit growth, SCV's are in six years' time forecasted to account for 80% of the total market. 

Roland Berger states that the demand for SCV's is driven by the rising need for intercity goods and passenger transportation, mainly the result of new applications for SCV's, prompting new customers to purchase the vehicles. “While some older applications include poultry, milk and water distribution, new applications are increasingly being developed to expand the market.”

Small commercial vehicle industry projected market evolution

In addition, government restrictions placed on vehicles, such as the overloading of cargo vehicles or on the entry of heavy commercial vehicles into cities, is stimulating the purchase of the more eco-friendly SCV's.