A convergence of premium and low-cost trucks has created a fast-growing mid-market segment in Asia, referred to as value trucks – a trend thats catching the attention of original equipment manufacturers and engine oil suppliers.
This new class of trucks is set for double-digit annual growth, with worldwide sales of more than 1 million units forecast for 2022, said Frost & Sullivan, a United States-based global market analysis and consulting group. And four-fifths of those sales will be in the Asia-Pacific region. Some 70 percent of all global value trucks will be sold in China and India, the group said in a recent report.
The value truck is based on a low-cost chassis, powertrain and cab template, dressed up with premium features such as telematics and driver comforts. A template, or platform, can be defined as a single set of common design, engineering and manufacturing elements shared between different products and vehicle makes.
The mid-market value truck is the most conducive for platform development and is expected to be the fastest growing sub-segment in the global truck industry, said Bharani Lakshminarasimhan, Frost & Sullivan’s automotive and transportation program manager.
These trucks are positioned at a price point of 20 percent to 25 percent over the entry level low-cost truck in each addressable market, Lakshminarasimhan told Lube Report Asia. He said the weight category is 6 metric tons and heavier.
Global truck OEMs are expected to focus initially on the stronger growth markets of China and India as they develop larger engines, better safety, more comfort and track-and-trace telematics for this new class of truck, the report said.
In China, fleets are willing to pay a premium for higher-powered trucks as the road infrastructure expands to accommodate bigger trucks with higher-power engines, the report said, adding that engine horsepower in the country is rapidly moving toward the higher ranges of 350-400 horsepower. In India, the power range is also increasing, though more slowly toward the 280-310 horsepower range.
Such enhancements will give Western OEMs such as Daimler, Volvo and Man, along with Japanese automakers, the opportunity to expand their markets. It will also give a faster payback to Chinese and Indian OEMs for money spent on research and development in building these trucks, Frost & Sullivan said. Chinese truck makers include SAIC-Iveco, JAC, Foton and Dongfeng. Indian truck makers include Tata Motors, Mahindra and Eicher.
Engine and powertrain enhancements will increase demand for higher-quality lubricants and greases. Shifts to improved technologies in other parts, including brakes and leaf springs, will also mean changes in the market for lube suppliers.
In a breakdown of the truck market for emerging markets of China, India, Indonesia and Africa, Frost & Sullivan forecast truck sales to grow to 2.27 million in 2022 from 1.33 million in 2014. The low-cost truck share of sales will shrink to 49 percent, down from 69 percent in the same period, as both the value-truck segment and the premium end of the market grow.