| The image and even the mythology of road transport | | | | local markets. |
| is inextricably linked to the largest and heaviest | | | | In the fast moving Chinese market, Zhanjiang Kingstar |
| vehicles on the road - hardly surprising given their size | | | | Vehicle Trading Co of Guangdong province is one of |
| and visibility relative to other vehicles. But in terms of | | | | the leading producers, with a product range partly |
| production and sales, large commercial vehicles (CVs) | | | | based on Toyota panel vans and pickups. Other |
| are far outnumbered by smaller vehicles, and | | | | co-operative ventures are also in place to produce |
| consequently, their economic importance to the global | | | | European and Japanese models in China. |
| motor industry is not as great as it is for smaller | | | | Hyundai/Kia is the dominant player in Korea and like |
| vehicles. John Kendall looks at the light commercial | | | | some Japanese producers, builds a specific model for |
| vehicle (LCV) sector. | | | | the European market. In India, the Tata Group is the |
| These smaller vehicles are known by a series of | | | | leading LCV producer with a model range based partly |
| names - vans, cargo vans and light commercial | | | | on old Mercedes-Benz models. We will consider |
| vehicles (LCVs), to pick out a few. | | | | individual manufacturers in a later section. |
| In itself, that causes a problem to start with. LCV | | | | In general terms, LCV products can be split into a |
| means different things in different parts of the world, | | | | number of categories by size and weight. Some are |
| since there is no agreed global definition of size or | | | | specific to certain markets, although continuing |
| weight. We focus on vehicles weighing less than | | | | rationalisation and globalisation is producing a more |
| 3,500kg (7,716lb) GVW (Gross Vehicle Weight), the | | | | uniform global pattern. |
| loose definition adopted in the European Union. In EU | | | | Key trends: 1. Japanese OEMs' role in Europe to |
| terms, these vehicles are defined as licence category | | | | increase in importance |
| B, under Directive 91/439/EEC, Article 3. just-auto shall | | | | The European LCV market is relatively robust, and |
| adopt this weight since it will cover the majority of | | | | does not see the same cyclical demand patterns as |
| vehicle types recognised as LCVs around the world. | | | | witnessed with either passenger car or heavy |
| Body types include microvans, car-derived vans | | | | commercial vehicles. This stability is of benefit to those |
| (CDVs), which are effectively passenger cars | | | | suppliers with forward investment decisions to make, |
| converted to carry light loads, purpose-built vans, | | | | but, conversely, it renders the marketplace quite static |
| chassis and double-cab variants of these, designed to | | | | in comparison with other sectors. just-auto regards the |
| accommodate varying types of bodywork such as | | | | Japanese OEMs as likely to play an increasingly |
| dropside, tipper, car transporter and box van, as well | | | | important role within Europe, and would point to Toyota |
| as pickup trucks. | | | | as being the manufacturer most poised to benefit |
| As has been indicated, LCVs are to an extent, defined | | | | from this trend. |
| by national driver licensing requirements. Across the | | | | Key trends: 2. Consumer confidence will be key factor |
| European Union for instance, the 3,500kg GVW limit is | | | | for NAFTA's lifestyle sector |
| the maximum weight of vehicle that new drivers are | | | | NAFTA has seen a marked substitution effect at |
| permitted to drive. | | | | work, with traditional car buyers now opting for one of |
| They may also be defined in other ways by national | | | | the growing number of lifestyle-designed LCVs. The |
| and international trade bodies. France, as an example, | | | | development of this lifestyle sector is - numerically - a |
| tends to classify LCVs as those below 5,000kg | | | | good thing, but, at another level, it renders the genre |
| (11,023lb) GVW in statistics compiled by the Comite | | | | liable to peaks and troughs in consumer as well as |
| des Constructeurs Francais d'Automobiles (CCFA). | | | | business demand. Whilst we accept that these two |
| The same definition is used in some production | | | | are linked, the increasing 'consumerisation' of the LCV |
| statistics compiled by OICA (Organisation Internationale | | | | market in NAFTA may prove to be a double-edged |
| Des Constructeurs D'automobiles). Unfortunately, OICA | | | | sword; rising interest rates and falling consumer |
| is not consistent and some figures record LCVs as | | | | confidence may well serve to take the shine off what |
| those below 6 tons (6,096kg) GVW. | | | | is otherwise a buoyant market sector. |
| While the EU-wide licence categories offer a fairly | | | | Key trends: 3. Diesel growth will be more significant |
| clear definition of an LCV, the current licence | | | | than alternative fuels |
| categories for vehicles were instituted in 1997 and | | | | NAFTA is also likely to witness a growing interest in |
| many member states still permit drivers licensed | | | | diesel powered LCVs. The recently renewed CAFE |
| before that date to drive vehicles in heavier weight | | | | requirements will make large capacity gasoline engines |
| categories ('grandfather rights'). Consequently, it will be | | | | a difficult legislative pitch, and just-auto regards the |
| many years yet before all car licence holders are | | | | growth of diesel as being of far greater significance |
| restricted from driving commercial vehicles without | | | | than that of alternative fuels during the life of this |
| taking additional driving tests. This still influences | | | | report. This may well serve the interests of the |
| vehicle-purchasing behaviour in those countries and is | | | | Japanese OEMs - already a reckonable force in North |
| likely to do so for some time to come. | | | | America - and may well cause the indigenous OEMs |
| Generally, the US takes a more liberal attitude to car | | | | to play a game of catch up. |
| licence holders. In many US States, holders of | | | | Key trends: 4. China's growth to slow but its - and |
| category C licences - the licence held by many car | | | | India's - exports to growjust-auto's views of the |
| drivers - permit them to drive vehicles up to 26,000lb | | | | emerging markets are perhaps unfashionable. We |
| (11,793kg) GVW. There is some degree of variation, | | | | view the Chinese market with some concern; on the |
| State-to-State, but overall this is a widely agreed limit. | | | | one hand, IP and fiscal issues make China a difficult |
| Not surprisingly, US cargo vans can be heavier than | | | | place in which to do business. On the other, it seems |
| our self-imposed 3,500kg GVW limit, so this report | | | | unlikely that the levels of growth witnessed to date |
| exercises some flexibility in the definition when dealing | | | | can be sustained over the long term. The Indian |
| with the US. Sectors such as the low cab forward | | | | market seems to have developed further than that in |
| (LCF) market in the US could be seen in the same light | | | | China, and we expect to see the development of a |
| as the LCV sector in other parts of the world. LCF | | | | global player - in Tata - over the life of this report. Both |
| models are generally heavier than 3,500kg GVW, but | | | | China and India boast a domestic vehicle sector, and |
| some discussion of them in this report is justified in the | | | | we regard an export driven approach from both |
| overall context of the US light vehicle market. | | | | markets as being a safe bet. Latin America is |
| It is also true to say that many European models within | | | | developing a regional self-sufficiency in terms of |
| the 3,500kg GVW limit are also produced at heavier | | | | vehicle production, driven in part by long-term |
| weights, satisfying the limited demand for such vehicles | | | | investments on the part of European OEMs. This is a |
| that can still be driven by older passenger car licence | | | | trend that we expect to see remaining constant, |
| holders. | | | | although the sourcing of LCV components from |
| Market overview | | | | Mercosur on the part of European OEMs would seem |
| Since many LCV models share driveline and body | | | | an entirely logical move. |
| components with volume passenger car models, it | | | | Key trends 5: Quality of local fuel supplies may be key |
| naturally follows that the dominant global passenger | | | | to emerging markets' OEMs' success |
| car manufacturers are also the leading LCV players. | | | | Perhaps key to the development of the emerging |
| At one time, many more models were based on | | | | markets is the availability of a high quality fuel supply. |
| passenger cars than is the case today, but Europe | | | | There is little benefit to be gained by existing emerged |
| has seen a reverse trend in recent years, where | | | | market OEMs producing products that are |
| passenger car versions of LCV models have become | | | | inappropriate for the fuel supply available to the end |
| more popular, as LCV chassis dynamics, comfort, and | | | | user in the emerging markets. The costs implicit in |
| noise levels have made a marked improvement. Such | | | | desulphurising the global fuel supply are huge, and |
| models used to be popular primarily in France, Spain | | | | just-auto remains unconvinced that refinery capacity in |
| and Italy, where the family car also doubled as | | | | high growth areas such as China will be sufficient to |
| business transport, but now their market appeal has | | | | allow for this program to occur without hiccups. If the |
| spread north across Europe as these models have | | | | emerged markets-based OEMs continue to produce a |
| moved upmarket. | | | | variety of different engines for different markets, there |
| Global market players include DaimlerChrysler, Fiat, | | | | will surely be a large strain placed upon their resources, |
| Ford, General Motors, Hyundai/Kia, PSA, Renault | | | | resulting in a shift back to the existing OEMs - such as |
| Nissan, Toyota and Volkswagen, who all produce LCV | | | | Tata and FAW - both of which may prove better |
| ranges. In addition to these, there are many other | | | | placed to serve demand from the emerging markets. |
| specialist manufacturers satisfying the needs of their | | | | |