Commercial vehicle industry under pressure to globalise and consolidate

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A study, Global Commercial-Vehicle Industry Outlook, from business advisory AlixPartners notes that in the medium term, further expansion is valid, especially in newly-industrialising countries where the sales-growth trend for commercial vehicles remains sustainable. However, in the longer term, a mature and thus cost-driven commercial vehicle market will only provide enough return on investment for those manufacturers that can capitalise on economies of scale, overcome historical inefficiencies and continue their globalisation, including by localizing products and supply chains.

The study also says that cost reductions can be achieved through worldwide economies of scale in products and in sourcing, including by adopting modular strategies, and by using optimised processes in cooperation with suppliers.

AlixPartners predicts that commercial vehicle assembly from the chassis through electronics, as well as production processes, will be modularised and standardised worldwide. Evaluations by the firm show that doing so could shave 20% off production costs and 30% off development costs.

While meeting new emissions and fuel-economy rules are forcing manufacturers to develop new drivetrains, the study predicts that most of the action will be in smaller diesel motors. The electrification of commercial vehicles, says the study, will for the time being be reserved only for vehicles in urban areas, and at that mainly buses and light-distribution vehicles.

The AlixPartners press release about this report is available to download on the right.