Shifting Preference a ‘New Normal’ in US Small Commercial Vehicle Market?

A shift in consumer preference towards small commercial vehicles in the US will encourage companies to innovate, thus boosting the global SCV market

Credible new data released in the past few days suggests a conspicuous, and mayhap permanent shift of American consumer preferences from compact cars and sedans to pickups, crossovers and SUVs that make up the light trucks market. The North American market is, as per TechSci Research report “Global Small Commercial Vehicle Market, Competition Forecast & Opportunities, 2011 - 2021”, the biggest market for SCVs, with US being the leading demand generator for the same. Therefore, TechSci experts have gotten together to deduce the implications of this fascinating shift. Two major points stick out:

Cheap Oil and How it Matters

The aforementioned report points out what was, at the time, a very incisive insight. Alternate fuels would decide how the small commercial market performs, given that there are better vehicles in terms of fuel economy. However, fuel inventories are just about as high as they were a year back, if not more, and markets are refusing to clear at higher prices. OPEC compliance rates are falling, as the cartel battles internal and external problems. In the past one year, WTI Crude has not even touched $55.

Not only is the small commercial vehicle market directly impacted due to decreased running costs, there is also the fact that low oil prices make for an increased savings rate for the average consumer, which makes it easier to finance SCVs.

The holy trifecta of low unemployment rates, low oil prices and rising disposable incomes is expected to especially boost the market for light trucks, pickups and vans, which form the backbone of the small commercial vehicles market.

To request the sample report, please visit: https://www.techsciresearch.com/report/global-small-commercial-vehicle-market-by-vehicle-type-light-buses-vans-pickups-light-trucks-etc-by-region-north-america-middle-east-africa-europe-cis-asia-pacific-south-america-competition-forecast-opportunities/935.html

Growing Competition from Foreign Players

Success in industry drives in competition; this is a fact. Through the first 6 months of 2017, total vehicle sales dropped by 2.1% compared with the same period in 2016; however, sales of light trucks, for example, grew by 4.6%, significantly higher than the auto industry average. The same is the case for pickups, which increased by 4.4% in the same period.

Consequently, we are seeing that car manufacturers such as Honda and Mercedes, companies not traditionally associated with the small commercial vehicle market, warming up to the idea. Mercedes-Benz is launching its new X-Class luxury pickups though it isn’t being sold in the US, given high import tariffs.

However, a successful launch may see some production shift to the US as Mercedes prepares to take on the biggest small commercial vehicle market. Honda Motor Co., with its Ridgeline pickup has also managed to capture around 10% of the midsize pickup market. Toyota and Nissan are other companies that have slowly shifted from sedans to pickups, vans and light trucks to accommodate shifting preferences.

Not only do these developments positively impact consumers by giving them more choices, they also force existing hegemons such as Ford and GMC to innovate with their products in order to compete. If oil prices hold, then the seismic shift in the US may see a domino effect as multinationals use the same technology and products in other countries to garner sales, significantly boosting the global small commercial vehicles market as a whole.

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