Light Commercial Vehicle (LCV) Market Size, Share & Trends Analysis Report By Vehicle Type (Pickup Trucks, Light Trucks, Others), By Propulsion Type (Internal Combustion Engine (ICE), Electric and Hybrid), By Applications (Commercial, Industrial Application) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global light commercial vehicle (LCV) market size was valued at USD 521.23 billion in 2023. It is expected to reach USD 815.55 billion in 2032, growing at a CAGR of 5.1% over the forecast period (2024-32). Economic development and industrial activities stimulate demand for LCVs in sectors such as construction, manufacturing, agriculture, and utilities. LCVs serve as essential tools for the transportation of materials, equipment, and goods, supporting business operations and supply chain logistics.

A motor vehicle with at least four wheels used to transport goods is known as a light commercial vehicle (LCV). LCVs distinguish between heavy trucks and light commercial vehicles because they have a specified mass in tons (metric tons). National and professional definitions determine this limit, which ranges between 3.5 and 7 tons. The demand for efficient and powerful light commercial vehicles is increasing as LCVs are used in more industries. The introduction of numerous companies' products in various regions of the world has positively impacted the expansion of the worldwide market.

Market Dynamics

Market Drivers

Development of the Automotive Industry

Due to technological improvements and the introduction of automobiles with efficient fuel consumption technology, the automotive sector has experienced tremendous growth in recent years. The development and introduction of cutting-edge commercial vehicles by numerous businesses, like Ashok Leyland and Tata Motors, to various regions worldwide has aided the expansion of the worldwide market. As an illustration, Ashok Leyland intended to de-risk its business from potential downturns by launching a new line of light commercial vehicles (LCVs). Additionally, major companies have been updating their current lineup of light commercial vehicles, which is anticipated to present the market with profitable chances.

Market Restraint

Availability of Alternate Vehicles

The desire for alternative vehicles, including electric rickshaws or smaller vehicles, to commute within cities has expanded due to the automobile industry's growth. For instance, producers have released cars that are more effective than light commercial vehicles, such as Tata Ace mini trucks, Mahindra Supro mini trucks, and Maruti Suzuki Super Carry mini trucks. Additionally, the ban on large LCVs entering cities during working hours has increased the demand for smaller LCVs, which is anticipated to hinder the market's expansion.

Market Opportunities

Increasing Government Initiatives for the Promotion of E-Mobility

Governments worldwide are pressuring automakers to invest in developing electric vehicles to combat greenhouse gas emissions and minimize carbon emissions brought on by the combustion of diesel fuel. In order to encourage the growth of the market for electric-based LCVs, governments are providing incentives through programs and plans for producing battery electric vehicles. Governments worldwide are also encouraging the purchase of electric vehicles by offering tax breaks and other incentives. Additionally, the central governments of a select few nations exempt electric vehicles from paying the highway toll levy.

Regional Analysis

The global light commercial vehicle (LCV) market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific is the most significant shareholder in the global light commercial vehicle (LCV) market and is expected to grow at a CAGR of 4.7% during the forecast period. LCV manufacturers, including Tata Motors, Ashok Leyland, Hyundai Motor Company, Isuzu Motors, and Toyota Motors, have made advancements fueling the market's expansion throughout the region. In addition, China is home to businesses engaged in the production of LCVs, including Anhui Jianghuai Automobile, Beiqi Foton Motor Co., Ltd., FAW Group Corporation, and Dongfeng Motor Corporation, which is expected to boost the market in China. Additionally, these automakers are trying to introduce electric LCVs to assist the electric vehicle infrastructure as green mobility is increasingly being adopted. By the end of the current fiscal year, Ashok Leyland intended to introduce its first electric light commercial vehicle. A recent creation meant to lead the business' EV strategy in India. The car will be presented under Switch Mobility Automotive.

Europe is expected to grow at a CAGR of 5.4% during the forecast period. Due to ongoing developments made by leading enterprises doing business in the region, the LCV industry throughout Europe has a significant potential for growth. The introduction of electric vehicles has also accelerated the market's growth because LCV manufacturers have started to invest in creating electric-propelled LCVs with improved efficiency to be used in various industries. In the UK, businesses like Ford Motor Company and Daimler AG have been active and are inclined to produce LCVs. The German government has also created low-emission zones (LEZs) throughout cities and metropolitan areas. For instance, there are 57 level-3 LEZs in Germany that forbid the entry of diesel vehicles.

North America is expected to grow significantly over the forecast period. Many businesses, such as Ford Motor Company and General Motors, have operations across North America and provide their cutting-edge LCVs to clients, assisting in the market's expansion in the region. Light commercial vehicles have become very popular throughout North America due to their expanding use in numerous sectors. Additionally, a wide range of regional manufacturers has been creating and introducing effective LCVs for various industries, which is projected to present a lucrative opportunity for the market's expansion. Since they have been operating here, businesses like Ford Motor Company and General Motors can provide consumers with a greater selection of LCVs. Additionally, these businesses are concentrating on innovations, such as launching a practical vehicle transmission system and introducing electric automobiles to support market expansion.

Resident income and LAMEA's increasing industrialization have contributed to the LCV market's expansion. A significant factor propelling the industry is the opening of production facilities by manufacturers like Ashok Leyland and Tata Motors throughout LAMEA. Local and international automakers like Renault, General Motors, and Nissan have operations in Latin America. They are highly motivated to expand their businesses by selling clients a greater variety of LCVs, which will fuel the expansion of the LCV market.

Segmental Analysis

The global light commercial vehicle (LCV) market is segmented by vehicle type, propulsion type, and application.

Based on vehicle type, the global LCV market is bifurcated into pickup trucks, light trucks, and others.

The pickup trucks segment is the highest contributor to the market and is expected to grow at a CAGR of 4.5% during the forecast period. A pickup truck is a light-duty truck with an open cargo space linked to the back side of the vehicle and a closed cabin. Manufacturers provide pickup trucks, including the Mahindra Bolero Maxi truck Plus, Ashok Leyland Dost+, and Isuzu D-MAX. Due to its many benefits, pickup trucks have significantly increased in popularity on the world market for light commercial vehicles. For instance, the vehicle offers a hauling and towing feature because it is made for moving around the city and performing different labor tasks. Furthermore, a pickup truck provides more versatility compared to other vehicles.

Light trucks are specifically constructed vehicles with gross vehicle weights of up to 8,500 pounds (3,860 kg) and a weight-carrying capacity of up to 4,000 pounds (1,815 kg). Light trucks have a more extensive range of applications because of their weight-carrying capability and gross weight, including freight transportation, the healthcare sector (hospitals on the road), poultry trucks, mobile ATMs, postal delivery, PU tankers, firefighters, and garbage trucks. Light trucks are more commonly accepted across various industries due to their higher payload and multiple features and benefits, including their ability to be employed in various applications and as water sprinklers and fuel tanks. Light vehicles are also adaptable, enabling efficient transportation. Additionally, they are regarded as long-distance vehicles, making them safer than smaller LCVs.

Based on propulsion type, the global LCV market is bifurcated into internal combustion engine (ICE) and electric and hybrid.

The internal combustion engine (ICE) segment owns the highest market share and is expected to grow at a CAGR of 3.4% during the forecast period. ICEs are the engines found in cars that run on fossil fuels like gasoline or diesel. The thermal energy created by the fossil fuel burning in the car's engine allows it to go forward. Due to the ICE engine's constant availability as a power source, ICE cars have several benefits, including efficiency in operation. Additionally, infrastructure that allows ICE vehicles to be refueled is available, which supports the segment's expansion.

Vehicles that are battery- or fuel-cell-powered, such as hydrogen fuel cell vehicles, are included in the electric and hybrid vehicles category. These vehicles run on motors mounted on axles rather than engines like those in ICE vehicles. Electric and hybrid LCVs are expected to gain significant traction in the global market for light commercial vehicles because LCV manufacturers like Tata Motors and Ford Motor Company have been leaning toward developing these vehicles. Models being developed by these businesses are expected to be released by 2025.

Based on application, the global LCV market is bifurcated into commercial and industrial applications.

The commercial segment is the highest contributor to the market and is expected to grow at a CAGR of 4.9% during the forecast period. LCVs can be used for commercial purposes to deliver goods and materials such as packages and couriers, e-commerce, white goods, fruits and vegetables, market loads, FMCG, and beverages. Due to ongoing expansion in several areas, including freight, transportation, and logistics, the use of LCVs for commercial purposes has significantly increased. LCVs are constantly needed for product transportation in these sectors. Thus, logistics organizations' increased use of small LCVs, such as cargo vans, to deliver their goods to various distribution points within cities significantly aids in expanding the market.

LCVS is widely used in various manufacturing, mining, and construction sectors. Due to their excellent weight-carrying capacity and top performance, light trucks are utilized primarily in industrial applications. Due to their excellent weight-carrying capability compared to other LCVS, light trucks have had strong traction in industrial applications. Additionally, light trucks' improved efficiency has accelerated their adoption in the construction and automotive industries, supporting the global market expansion.

Recent Developments

• May 2024 - During the 2024–2025 fiscal year, Ashok Leyland plans to introduce six new models in the Light Commercial Vehicle (LCV) class, ranging in payload capacity and powertrain options, in an effort to increase its market share. By introducing these vehicles, the domestic commercial vehicle manufacturer hopes to increase its medium-term market share in the 2-3.5 tonne light-duty truck segment from 20.4 percent to approximately 25 percent.
• February 2024 - Based on Hyundai's Global eLCV platform, Hyundai Motor Company and Iveco Group (EXM: IVG) announced the signing of a supply agreement for an all-electric light commercial vehicle for Europe under the IVECO brand. Along with the venerable IVECO Daily, the new car will expand the Iveco Group's lineup of electric light commercial vehicles.