The research study covers the present scenario and growth prospects of the global towing equipment market for 2017-2021. The market is segmented based on application (passenger cars and commercial vehicles) and geography (APAC, EMEA, and the Americas).
The primary applications of towing equipment are related to automotive accessories for light commercial and recreational vehicles. Purchases of towing equipment are discretionary and demand is driven by macroeconomic factors, including employment trends, consumer confidence, fuel prices, and interest rates among others. The global automotive market is expected to achieve a similar growth in the coming years. The growth in the automotive market is anticipated to boost the demand for towing equipment during the forecast period.
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Technavio heavy industries research analysts highlight the following three factors that are contributing to the growth of the global towing equipment market:
- Increasing motorization in emerging countries
- Progressing requirement of commercial vehicles for road mode of freight transport
- Rising growth of e-commerce industry and subsequent increase in delivery services
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Increasing motorization in emerging countries
Passenger cars occupy a major share of the towing equipment market. Therefore, the increase in sales of passenger cars will lead to an increased demand for towing equipment units. Emerging countries, such as China and India, have a lesser penetration of motorization when compared with the developed economies of the US and Europe.
Gaurav Mohindru, a lead construction research analyst at Technavio, says, “The increase in disposable income, especially within the emerging nations, is expected to create more new demands in the automotive sector and will lead to an increase in the number of first-time buyers. About two-third of the global consumer spending came from rapid growing markets such as China, India, Brazil, and South Korea in 2016. The rising population of middle class in China, India, Brazil, and South Korea with an increasing household earning is expected to drive the towing equipment market in the coming years.”
Progressing requirement of commercial vehicles for road mode of freight transport
Increased global urbanization rates lead to a trend of increased consumption within an economy. The World Bank estimated that about 55% of the global population resides within urban and semi-urban areas in 2016. Most of the growth of global urbanization occurs within developing nations such as India, China, and Brazil. Adequate amount of transportation services is required to meet the rising demands of the population within urban areas.
“There is a growing preference for road transportation in emerging countries such as India and China due to limited number of freight rail services within these countries. Heavy-, medium-, and light-duty vehicles are used extensively for transporting cargo in China. There has been a subsequent decline in the volume of rail freight year-over-year,” adds Gaurav.
Rising growth of e-commerce industry and subsequent increase in delivery services
The rising popularity of the e-commerce industry and the increasing volumes of online delivery orders resulted in the blooming of delivery services and courier services industry in 2016. The rising number of delivery orders and the subsequent growth of courier delivery agencies are driving the sales of commercial vehicles that are crucial for transporting goods.
The growth of e-commerce industry largely depends on timely distribution of goods and services to customers. Increased competition within the e-commerce industry has resulted in e-commerce companies opting for aggressive pricing strategies and minimal delivery intervals. E-commerce companies are known to enter partnerships with or acquire parcel delivery companies to minimize delivery intervals in increased competitiveness.
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