Eight Transformational Trends Influencing the Global Trucking Industry’s Growth Trajectory

Green, Safe, Connected, and Smart Technologies Enabling Transition from Product- to Service-Based Business Model

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August 2016

Brief Summary

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Contents

Section Slide Number

Executive Summary 3

Research Scope, Objectives, Background, and Methodology 7

Definitions and Segmentation 14

Top 8 Transformational Shifts Shaping the Future of Commercial Trucking 16

Conclusions 58

Appendix 64

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Executive Summary

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Digital Transformation

Autonomous Trucking

Source: Frost & Sullivan

Rise of Value Trucks

1

Urban Trucking

5

2 3

Dealership Evolution

8

Rise of Asian OEMs

7

Beyond BRIC

6

Platformization

4

Executive Summary—Top 8 Transformational Shifts Shaping the

Future of Commercial Trucking

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Demand Generator

Create

Shipment Navigation

Resource

Management

Transportation

Management

Logistics

Management

Returns

Management

Loading/

Unloading

Quality

Management

Inventory

Management

Yard

Management

Last-Mile

Delivery

P

Mediator Freight Forwarder Delivery of Freight

Fast Ship

Pack

Shipments

Loading/

Unloading

Document

Management

Schedule &

Manage Pickups

Mobile-Based

Brokering

Payment –

Generate Bills

Load Boards

Get Rates and

Transit Time

SAP

SAP

SAP

Executive Summary—Industry Transformation The freight mobility industry is experiencing transformation across all verticals, creating new revenue streams

and opportunities.

Source: Frost & Sullivan

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1

2

3

4

5

Value trucks will be the fastest-growing price segment in the next decade, expected to nearly

triple in volume to account for 31% of total truck sales globally by 2025. Demand for this

segment will be driven by fleet modernization efforts in China and India, which are the dominant

low-cost truck markets.

Key global OEMs have 48 heavy-duty and 43 medium-duty truck platforms. More global

platforms are expected in the next decade as OEMs look to expand in Asian markets.

Autonomous driving technologies are gaining traction and are expected to garner considerable

OEM support to reach significant scalability by 2025, the year in which level 3 autonomous

trucks are expected to enter the market.

Integration of digital technologies primarily for resource management and total cost optimization

will result in the evolution of truck technology from basic telematics services to advanced traffic

modeling, weather prediction, and social media analytics.

Transformational Shifts: Top 5 Insights, Global, 2015–2025

A significant portion of global truck market growth in the next decade will come from the Next 11,

ASEAN, and Middle East and Africa regions. Africa’s truck market is expected to grow at a 6.4%

CAGR to cross 174,000 annual sales in 2025 buoyed by the establishment of the African

corridor, expansion of free trade agreements within the continent, and better use of natural

resources.

Executive Summary—Top 5 Insights Technological, demographic, environmental, and geopolitical shifts are altering the commercial truck market

globally.

Source: Frost & Sullivan

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Research Scope, Objectives, Background, and

Methodology

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Research Scope

Commercial trucks with GVWR 6 tons and above Vehicle Type

2016–2025 Forecast Period

2015–2025 Study Period

2015 Base Year

Global

• North America consists of the United States and Canada

• South America includes all countries of Latin America except

Mexico

• Europe consists of the 28 countries of the European Union

• China

• India

• Russia

• Next 11 (Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,

Philippines, Turkey, South Korea, Vietnam, and Bangladesh)

• Rest of World (RoW)

Geographical Scope

Source: Frost & Sullivan

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Research Aims and Objectives

Aim

• To identify and understand the key trends altering the commercial truck landscape.

Objectives

• To provide insights and likely key new technologies for 2015–2025.

• To outline market dynamics, key trends, market drivers and restraints, and industry challenges.

• To compare and analyze the influence of major trends in the commercial truck market globally.

• To provide strategic recommendations and conclusions for OEMs, Tier I suppliers, and fleet owners

based on Frost & Sullivan analysis.

• To analyze competitive factors, competitor market shares, and product portfolios and capabilities.

• To develop an actionable set of recommendations for market growth and sustenance.

Source: Frost & Sullivan

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Key Questions this Study will Answer

What are the key trends shaping the future of the commercial truck market?

How will truck features evolve by 2025? What will be the key technologies?

What will be the product focus of key OEMs in each region?

What will be the technology strategy for truck OEMs across regions?

What is the projected volume of truck sales across key regions in 2025?

What are the drivers and restraints of the global commercial truck market?

Source: Frost & Sullivan

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Research Background

This research builds on content from Frost & Sullivan’s recently published studies in the area of business

strategy and innovation:

K046-18 2025 Vision of Transformations in Global Medium-Duty Truck Market (2016)

NF9E-18 Executive Analysis of the Global Medium and Heavy Duty Truck Transmissions Market (2016)

NEC5-18 Strategic Outlook for Autonomous Heavy-duty Trucks (2015)

NF51-18 Executive Outlook of Hyundai’s Global Commercial Vehicle Market Activities (2015)

NF8D-18 Executive Analysis of Medium-Duty and Heavy-Duty Value Truck Market in Select Emerging

Economies (2015)

NFAB-01 Executive Profiles of Key Truck Telematics Vendors—PART 1(2015)

P895-18 Strategic Analysis of Chinese Light, Medium, and Heavy-Duty Commercial Truck Market (2015)

ND32-18 Strategic Analysis of Global City Truck Market (2014)

NC9A-18 Commercial Vehicles 2020 Vision (2014)

NE67-18 Executive Impact Analysis of Big Data in the Trucking Industry (2014)

This study is supplemented by ongoing interactions with vehicle manufacturers and suppliers in the area of

business strategy and innovation. Source: Frost & Sullivan

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Research Methodology

Research Methodology: Frost & Sullivan’s research services are based on secondary and primary

research data.

Secondary Research: Extraction of information from reports and project material in the

Frost & Sullivan database, and data and information gathered from technical papers, specialty magazines,

seminars, and Internet research.

Primary Research: More than 15 interviews were conducted over the phone by senior consultants and

industry analysts with original equipment suppliers, regulatory authorities, and distributors. Primary research

accounts for 80% of the total research.

Note on Images: Images have been used with permission of the copyright holder.

Source: Frost & Sullivan

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Key OEMs Compared in this Study

Group Commercial Vehicle OEMs

Daimler

Mercedes-Benz, Freightliner,

Western Star, Mitsubishi Fuso,

Thomas Built, Bharat Benz,

Setra

Volvo Volvo, UD, Renault, Mack,

Eicher

Volkswagen Volkswagen Commercial

Vehicles, MAN, Scania, SEAT

BAIC Foton Motor

Navistar Navistar, IC Bus, SST Truck

Company

Hyundai Motor

Group (HMG)

Hyundai, Kia, Sichuan

Hyundai Motor Company

Group Commercial Vehicle OEMs

Isuzu Isuzu

Dongfeng DFM, Dongfeng Peugeot-Citreon

Paccar DAF, Kenworth, Peterbilt

Ford Ford

Tata Tata Motors

CNH Iveco, Iveco Astra, Heuliez Bus

Toyota Toyota, Daihatsu, Hino

CNHTC Sinotruck

FAW FAW

The following OEM groups are compared in this study:

Source: Frost & Sullivan

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Definitions and Segmentation

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Reference

Vehicle

Classification Definition GVWR Typical Applications

MD Medium-duty

truck

All types of midsize

trucks

Class 47

GVWR >6 tons

and < 16 tons

Home delivery, logistics, parcel

delivery, utilities, waste and recycle

collection, refuse, truck tractor

HD Heavy-duty truck All types of large trucks

Class 8

GVWR >16 tons

Line-haul freight, refuse collection,

mining and construction, and other

vocations that demand high GVWR

trucks

Commercial Vehicle Definitions and Vehicle Segmentation Trucks are classified as light, medium, or heavy based on a combination of GVWR and vocation. This study

addresses the MD and HD truck segments only.

Commercial Vehicle Market: Definitions and Segmentation, Global, 2015

Source: Frost & Sullivan

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Appendix

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A/C Air Conditioning HD Heavy Duty

ABS Antilock Braking System HP Horsepower

ASEAN Association of South East Asian Nations ISS Integrated Safety System

CAGR Compound Annual Growth Rate ITS Intelligent Transportation System

CV Commercial Vehicle MD Medium Duty

EBS Electronic Braking System NAFTA North American Free Trade Agreement

EGR Exhaust Gas Recirculation OEM Original Equipment Manufacturer

ESC Electronic Stability Control RoW Rest of World

EU European Union TCO Total Cost of Ownership

FMS Fleet Management System TFTA Tripartite Free Trade Area

GCC Gulf Cooperation Council V2V Vehicle to Vehicle

GVWR Gross Vehicle Weight Ratio V2X Vehicle to Everything

Abbreviations and Acronyms Used

Source: Frost & Sullivan