BCG: New trucks are essential
The Boston Consulting Group says truck manufacturers need to bolder if they want to advance in BRIC nations (Brazil, Russia, India, and China) and emerging markets. By 2020, the analyst estimates that new trucks could account for more than 70% of trucks sold there, or 44% of the global total. The Winning the BRIC […]
New trucks are needed as fleets age
The Boston Consulting Group says truck manufacturers need to bolder if they want to advance in BRIC nations (Brazil, Russia, India, and China) and emerging markets. By 2020, the analyst estimates that new trucks could account for more than 70% of trucks sold there, or 44% of the global total.
The Winning the BRIC Truck Battle: How Global and Local Players Can Tap the Full Potential of BRIC Truck Markets’ study focuses on commercial freight-transport vehicles whose gross vehicle weight is at least 3.5 tons. These vehicles include heavy vans, medium-weight trucks, and heavy trucks such as tractor-trailers.
Although the traditional truck makers of Japan, North America, and Western Europe will remain important, producing 33% of global sales and 37% of global truck profits by 2020. BCG says truck OEMs that want to be global players will have to be competitive in emerging markets. These markets are expected to generate 64% of truck-sales volumes and roughly 50% of global truck revenues and profits by 2020, according to BCG. The key to winning the BRIC truck battle will be meeting demand for in the new mid-market segment.
Mid-market trucks will be more sophisticated than today’s vehicles from BRIC OEMs but less so than the premium trucks produced by global OEMs, such as Mercedes-Benz, MAN, Scania, Freightliner, Volvo, and Isuzu. Customers will demand more powerful engines, more comfortable cabins, and better fuel efficiency than are offered by the low-cost vehicles that currently dominate merging markets.
“Manufacturers need to get into these countries and develop their midmarket products soon or they will be shut out,” said Nikolaus Lang, co-author of the report. “Local OEMs such as Tata, Kamaz, and Dongfeng are big and profitable and have local knowledge and networks. Some anufacturers have started to localise, but BRIC companies seem well ahead in developing midmarket concepts. Wait and it will be too late.”
