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Strategic Analysis of the South Korea Commercial Vehicles Market
Frost & Sullivan, April 2009, Pages: 120
This Research Study covers in detail South Korean commercial Vehicle market. This study covers key research findings; total market for commercial vehicles;deman analysis; competitive environment analysis; regularatory impact analysis; growth opportunities; strategic conclusions and key recommendations; profiles of key market participants; appendix and decision support database.
Research Overview
This Frost & Sullivan research service titled Strategic Analysis of the South Korea Commercial Vehicles Market provides an overview of the market for commercial vehicles, the drivers, restraints, industry challenges, market size, and forecasts for the segment.
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Market Overview
Exports to FTA Signatory Countries to Rev up South Korean Commercial Vehicles Market
The South Korean domestic commercial (CV) sales figures amounted to 195,629 units in 2008, falling by 16.0 percent from 232,919 units during 2007. The top five domestic original equipment (OE) manufacturers – Hyundai, Kia, GMDaewoo, Daewoo Bus, and TataDaewoo – hold sway over the South Korean CV market. In the near future, CV manufacturers are expected to ratchet up exports to countries that are signatories to the Free Trade Agreement (FTA) with South Korea. According to the terms of this agreement, tariffs for imported South Korean CV markets will be reduced or waived. The market is characterized by intense competition in the small commercial market segment, forcing vehicle manufacturers to roll out newer models to stay ahead in the race.
Developments, such as the hike in diesel prices, have deeply impacted this sector. During 2008, diesel prices hit unprecedented highs in South Korea. “Average price of diesel in South Korea in 2008 was 1.4 USD per liter compared to 0.9 USD per liter in 2005,” notes the analyst of this research service. “Potential customers have postponed plans to purchase CVs as a result of high diesel prices.” To provide a shot of adrenalin to the market, the Government has stepped in, offering a waiver for registration tax for mini commercial vehicles under 1,000cc. The Government offers financial assistance for automakers that adopt green technologies. OEMs and suppliers are focused on the development of systems and modules for CVs. To comply with stringent emission norms, CVs technologies include exhaust gas recirculation. (EGR) and selective catalytic reduction (SCR) systems for powertrain and participants in this space are striving to achieve reduced emission levels with high fuel efficiency. EGR and SCR systems have been introduced to meet Euro IV and V in South Korea. The SCR system is able to achieve 5 percent more fuel efficiency as compared to Euro III.
Global Economic Downturn Jeopardizes the CV Market
The CV market in South Korea has felt the direct repercussions of the global economic meltdown. “The global financial crisis has resulted in a slowdown in the construction sector and decline in exports; the CV market, especially the large-sized truck segment, has been severely affected,” explains the analyst. Apart from the spillover effect of the economic downslide, the small market perimeter is exacerbating competitive pressure on CV manufacturers and tile-1 suppliers. In such a scenario, it is imperative for participants to go the extra mile to establish alliances and partnerships with global truck and system manufacturers to open up new vistas for the market. Moreover, strategic partnerships between South Korean CV manufacturers and global CV market participants will create synergistic relationships and foster the growth of both parties.
The absence of core component technologies, such as transmission for truck and bus, will impact the future of the CV market in South Korea. The widening technology gap will eventually lead to market share loss to foreign CV manufacturers. OEMs and suppliers must give due consideration to the development of core technologies and CV components. Major OEMs and suppliers must deploy professional engineers for CV technologies and invest in CVs joint research. Apart from this, cooperation between institutes and CV market participants will improve investment efficiency. Expanding and enhancing the infrastructure is vital not only for the local market but also in the larger context, it will enable South Korea to emerge as a manufacturing source for global markets.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Trucks
- Buses
- Special purpose vehicles
- Technologies
The following technologies are covered in this research:
Commercial vehicle powertrain
- Safety
- Chassis
- Telematics
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