LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the light commercial vehicle market in Europe to grow at a CAGR of close to 4% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the light commercial vehicle market in Europe for 2017-2021. The report also lists conventional fuel and alternative fuel as the two major segments based on fuel type.
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the LCV market in Europe:
- Growth in construction industry and e-commerce to drive market demand for LCVs
- Resurgence of new ridesharing platforms, increasing the van sales
- LCVs emerge as an important tool for SMEs business processes
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Growth in construction industry and e-commerce to drive market demand for LCVs
Rising rates of urbanization are expected to increase the demand for construction of residential, commercial, and recreational centers during the forecast period. This is expected to drive the demand for additional vehicles to complement transportation of workforce and materials for construction within cities.
Rising urbanization is causing retail and distribution centers to be shifted within the proximity of urban areas. Online retail sales and E-commerce have been rising due to increased penetration of internet connectivity and smartphones. This will result in an increased purchase of LCVs for facilitating timely delivery of items to buyers.
According to Ganesh Subramaniam, a lead analyst at Technavio for automotive manufacturing research, “LCVs are poised to replace medium-duty commercial vehicles as LCVs with turbochargers have increased cargo carrying capacity and fuel efficiency. Moreover, LCVs are not affected by emission norms. Hence, these are being increasingly produced by vehicle manufacturers for meeting the transportation and logistics needs of urban and semi-urban areas in Europe.”
Resurgence of new ridesharing platforms, increasing the van sales
Though large vans are not a part of family garages in Europe, they still see an increase in demand due to the emergence of new ridesharing platforms. On-demand ridesharing services help in making the city traffic efficient and sustainable as it involves spacious and more comfortable vans. For instance, Mercedes-Benz Vans is set to enter the ridesharing industry in Europe. In September 2016, Daimler got into a joint venture with the US start-up company Via. Via is focused on developing scalable and on-demand ride sharing solutions. Via uses a smart algorithm, which enables a dynamic mass transit system that reduces traffic in urban areas. Together the two companies aim to introduce on-demand shared rides in Europe, which would increase the demand for passenger vans in the European region
“The joint venture would bring the concept of On-Demand Shuttle Operating System, which is Via's proprietary technology to the European market. This will enable vans to be dynamically routed to thousands of virtual bus stops across the city. This innovative public transit system would reduce traffic volumes in the city without the need for expensive infrastructure developments,” says Ganesh.
LCVs emerge as an important tool for SMEs business processes
In addition to being the key players in the logistics chain and enabling 'last mile' delivery of goods in both urban and rural areas, LCVs are largely used by small and medium enterprises (SMEs) as a business tool, which helps them thrive in the market. LCVs serve different purposes and can be tailor-made to serve various requirements such as cold storage, ambulances, freight forwarding, and passenger transport. This versatility ensures that other transport services can not easily replace LCVs. For example, Mercedes Sprinter platform provides transport solutions in five different vehicle categories, from a panel van to various solutions for passenger transport, ranging from 6-seater to 22-seater.
Especially for small and medium business companies, the LCVs act as an essential tool which helps them get their business done. However, the transport efficiency and total cost of ownership are the decisive purchasing factors for the customers.
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