Despite the global semiconductor chip shortage, the integration of technologies and growing demand from the infrastructure, construction, and mining industries should drive the commercial vehicles industry’s growth. Commercial vehicle manufacturers Volvo (VLVLY) and Hino Motors (HINOY) are well-positioned to cash in on the industry tailwinds. In contrast, their weak financials could lead Proterra (PTRA) and Workhorse Group (WKHS) to a downturn in the near term. So, let’s examine all four names.Rebounding demand from the resumption of infrastructure, construction, and mining activities has propelled commercial vehicle sales this year. Although major automakers have announced production cuts for the rest of the year owing to the global semiconductor chip shortage, increasing capital investments in the semiconductor industry and rising vehicle prices should buoy the industry.
Furthermore, in addition to rising demand, efforts to integrate technologies and electrification should keep driving the industry’s growth. The global commercial vehicles market size is expected to grow at 5.2% CAGR to $1.82 trillion by 2028.
With strong fundamentals and global market reach, we think Volvo AB (OTC:VLVLY) and Hino Motors, Ltd. (HINOY) are well-positioned to capitalize on the industry tailwinds. Conversely, Proterra Inc. (PTRA) and Workhorse Group Inc. (WKHS) might fail to benefit from the growing demand due to intense competition and their weak fundamentals.