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The global medium & heavy trucks industry posts strong growth in 2013
Despite the on-going financial difficulties being experienced in many nations around the world, demand for medium & heavy trucks has continued to grow, with strong growth experienced in 2013.
The global medium & heavy trucks industry grew by 7.5% in 2011, to reach a value of $209.8 billion, representing a compound annual growth rate of 9.9% for the period spanning 2009-2013.
Stronger growth was experienced in the smaller markets – the Americas and the Middle East and Africa, although growth was strong in the largest market, the Asia-Pacific. Growth was strong in the largest single market, China, stimulated by a steady macro economy and a replacement for demands.
Requirement to meet more stringent environmental standards can help to spur growth. For example, standards in the EU were changed from Euro V to Euro IV in December 2013. LMC Automotive analyst Zita Zigan said, “The European truck market has been lifted somewhat over the past year as many operators have chosen to bring forward purchases ahead of Euro VI. The price difference for Euro VI compliant trucks versus Euro V can be in the region of EUR12,000 per vehicle, a pretty significant sum.” This increase in price can mean that an initial surge in buying can plateau as market ‘payback’.
The requirement to meet more stringent environmental standards is catching up in the Asia-Pacific region. In China, the current emissions standards are China IV and China V, dependent on region. In early 2014, China’s Ministry of Environmental Protection issued a new nationwide standard, requiring heavy-duty diesel engines for use in urban applications to be tested over the World Harmonized Transient Cycle. India has imposed more stringent standards on engine emissions, called Bharat Stage IV, based on Euro III or IV (depending on region). A rollout of BS IV+ is expected to be rolled out in major cities in 2016, with a nationwide implementation starting from January 2017. Following this, a national rollout of BS V will take place in 2022. Since 2005, Japan has tightened its earlier, more relaxed regime on nitrogen oxide and particulate emissions; the current standard is similar to the US and Euro V standards. Japan also imposes fuel efficiency rules on vehicles including medium and heavy trucks, which are due to become more stringent from 2015 onwards.
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