QUEST FOR SILVER LININGS & POTS OF GOLD
According to Contrive Datum Insights, the commercial vehicle market is expected to reach around $1,712.44 billion by 2030 and grow at a CAGR Of 8.7% during the forecast period 2023—2030. That’s great news for manufacturers, and it also bodes well for the companies that supply them.
However, with news cycles dominated by stories such as the UAW strike and possible worldwide Lithium shortages, it’s understandable that many commercial vehicle professionals might suffer a bout of frustration now and again. Maybe even an occasional lapse into a doomsday funk. Things have been funky for several years running, so we can forgive that. But we’re here to talk about growth opportunities amid the chaos that seems to define the current state of the commercial vehicle industry.
Most everyone has heard the old adage, “In the midst of chaos, there is also opportunity.” Usually attributed to a military general in ancient China named Sun Tzu, this sentiment couldn’t possibly be more relevant for today’s commercial vehicle manufacturers, dealers, upfitters, and end users.
The commercial vehicle industry has been in a state of turmoil for several years, and while there’s no denying that this is a challenging time for dealers and end users alike, there are also opportunities to be found in the chaos.
As electric vehicles (EVs) become more mainstream and green initiatives gain traction, we have no option but to deal with how the push affects our day-to-day operations and decisions for the future. Looking ahead, we should anticipate that market dynamism will create its own growth opportunities for pioneering solutions.
Here are two examples of current issues causing much consternation within the commercial automotive industry at large, and possible silver linings.
Amid the pressures of moving towards zero-emission vehicles, there are silver linings. On the one hand, governmental emphasis on green energy is creating challenges to long and even medium-term fleet planning. Conversely, we see potential rebates and tax incentives for businesses that adopt environmentally-friendly transportation solutions. Such initiatives can lead to significant savings, making the transition to zero-emission vehicles more achievable.
There is also the issue of recharging infrastructure to contend with. Here again, we have entered uncharted waters where options like installing a charging station in the company yard are real possibilities.
If we maintain an open mind, we can see new ways of doing business that have just recently emerged.
Growth is good, but while financing growth has always been a challenge, the prices of commercial vehicles in the last two years have generally been elevated. For improvements such as fleet upgrades, internal accruals combined with loans can be a viable solution. However, financing fleet vehicles has become a major issue. Can we find a silver lining here?
Indeed, we’re already seeing some financing institutions working with OEMs and fleet management companies to create and iterate on comprehensive fleet lease models.
These models can defray the upfront costs and streamline operations by introducing predictability in expenses. Moreover, they can enhance efficiency by alleviating the burden of fleet management and potentially bolster profitability in the long term.
In today’s digital era, technology has become an agent of growth. For commercial vehicle professionals, staying updated on the latest technological advancements, including fleet tracking systems and AI-powered predictive maintenance platforms, plays a crucial role in efficiency. Because efficiency has become the cornerstone of remaining competitive and facilitating growth, businesses can no longer ignore technology.
Virtually every aspect of daily business has been or can be digitized. What’s more, software and hardware can frequently be integrated into systems and programs designed to, you guessed it, increase efficiency.
Additionally, employing technology can provide a wealth of data. Tracking vehicle usage information, fuel consumption patterns, and driver behavior can help managers make informed decisions and optimize vehicle usage; again, maximizing efficiency and driving growth.
Times of uncertainty often give way to opportunities, and the commercial vehicle industry is no exception. From tax incentives that make EV adoption more affordable, to leasing models that create streamlined operations, to leveraging technology and data for efficient operations—these are the “silver linings” and “pots of gold” that businesses can, and should, leverage to grow and prosper amidst evolving landscapes.
So for the truck pros, commercial vehicle business owners and commercial fleet managers reading this, it’s time to step up, adapt, and seize the opportunities that lay before you. And a resource you should consider is the virtual Commercial Vehicle Business Summit that will have leaders from across the industry discussing current challenges, and opportunities.