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Thursday, July 05, 2012 India is emerging as one of the world's key markets for hybrid and electric medium-heavy-duty trucks and buses. Changing market dynamics and customer perceptions towards green technologies have made the price sensitive Indian customers migrate towards new vehicle technologies.






Global original equipment manufacturers (OEMs) and suppliers are hence encouraged to develop strong and sustainable partnerships with Indian OEMs in order to penetrate and grow within this market. Thus, the necessity to develop innovative products, technologies and supply chains that enable reduction of both upfront and lifecycle costs associated with these vehicles is crucial, although currently these are perceived by many potential customers as prohibitive.

New analysis from Frost & Sullivan ( http://www.transportation.frost.com), Strategic Analysis of Medium- to Heavy-duty Hybrid and Electric Commercial Vehicle Market in China and India, finds that component revenues from India will reach $212 million by 2020, accounting for 11 percent of the global component market. Driven by energy price volatility and rising consumer awareness, the market for hybrid and electric commercial vehicles (CVs) is experiencing considerable momentum. Of all of the alternative powertrain technologies, hybrid technology poses the least pressure on existing infrastructure.

"High fuel prices, uncertain diesel regulation policies and green initiatives by Government owned State Transport Units for clean technologies, coupled with OEM's willingness to partner with foreign module suppliers developing hybrid and electric powertrain systems, are creating a foundation for the hybrid and electric CV market in India," said Frost & Sullivan Research Analyst.

Currently, the biggest challenge in the market is the high upfront cost of technology and the lack of charging infrastructure to support growth. The Government's inclination towards liquefied petroleum gas and compressed natural gas (LPG/CNG) technology are impeding faster market penetration of hybrid and electric CVs. Lack of in-house research for local OEMs and suppliers is expected to prevent price reduction of key components due to the dependency on expensive imports.

"Along with factors such as high upfront cost barrier and lack of charging infrastructure, the battery replacement cost burden and battery life cycle concerns are acting as key market restraints for hybrid and electric powertrain adoption in CVs," noted the Analyst. "The price sensitivity of Indian customers implies that strategies aimed at reducing the upfront cost - either of the base vehicle, the hybrid/electric drivetrain or both - must be implemented on a priority basis to establish market leadership."

If you are interested in more information on this research, please send an email with your contact details to Ravinder Kaur or Priya George, Corporate Communications, at ravinder.kaur@frost.com or priyag@frost.com.

Strategic Analysis of Medium- to Heavy-duty Hybrid and Electric Commercial Vehicle Market in China and India is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: North American Medium-Heavy Commercial Vehicle Market, Brazilian Commercial Vehicle Market and the Global Low-cost Truck Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.




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