Canada light commercial vehicle Market Size, Share, Competitive Landscape and Trend Analysis Report, by Vehicle Type, Propulsion, Application and Domain : Global Opportunity Analysis and Industry Forecast, 2024-2030

The Canada light commercial vehicle market was valued at $ 32,043.0 million in 2023, and is projected to reach $ 50,702.5 million by 2030, growing at a CAGR of 7.1% from 2024 to 2030.

Light commercial vehicle (LCV) is a vehicle designed for transporting goods or passengers that have a gross vehicle weight rating (GVWR) of up to 4.5 tons (10,000 pounds). Light commercial vehicles (LCVs) are utilized in a wide range of commercial activities across various industries, including construction, delivery services, logistics, and public transportation. LCVs include a range of vehicle types such as pickup trucks, vans, light trucks, and others. LCVs have a wider application in different industries such as construction, utility, retail, healthcare, and agriculture and due to this increased application across different industries, the demand for efficient and powerful light commercial vehicles has increased.

Automakers in Canada are increasingly focusing on larger vehicles and adapting to market shifts. Following the 2023 model year, many manufacturers have ceased production of small cargo vans. This shift reflects broader trends where manufacturers prioritize larger commercial vehicles and heavy vans, responding to consumer demand for versatility, space, and utility. Furthermore, the innovations in vehicle connectivity and autonomous technologies are driving sales of larger vehicles, enhancing operational efficiency, safety, and appeal to consumers seeking advanced features and capabilities.

Key Takeaways

• On the basis of vehicle type, the others segment held the largest share in the Canada light commercial vehicle market in 2023.
• On the basis of propulsion, the ICE segment held the largest share in the Canada light commercial vehicle market in 2023.
• By application, the Commercial use segment held the largest share in the market in 2023.
• On the basis of domain, the retail segment held the largest market share in 2023.

The launch of new electric light commercial vehicles (LCVs) marks a significant shift in the automotive market, driven by environmental concerns and regulatory pressures. The Canadian government's plan to mandate all passenger cars, SUVs, crossovers, and light trucks sold by 2035 must be zero-emission vehicles (ZEVs) is a pivotal factor. This initiative is part of a broader strategy to combat climate change, with ZEVs required to comprise at least 20% of all car sales by 2026 and 60% by 2030. However, the electric vehicles (EVs) accounted for 11.3% of new vehicle sales in 2023. For instance, FCA US LLC (Stellantis), under its RAM subsidiary, introduced a new Pro Master electric van lineup. These vans are available in two models, both based on a 4,038-mm (159-inch) wheelbase, designed for delivery or cargo applications. The delivery model features a standard sliding pocket door for the driver, with an option for an aluminum roll-up rear door.

Manufacturers are leveraging advancements in battery technology to extend range and enhance performance in these electric LCVs, addressing previous barriers to adoption. Government incentives further encourage fleet operators to invest in these vehicles, which promise reduced emissions and operational costs, appealing to businesses aiming for sustainability and cost-efficiency. As infrastructure for charging networks continues to expand, the practicality of electric LCVs for daily commercial use improves, bolstering their appeal amidst evolving regulatory landscapes and market demands.

The shutdown of production for compact vans could significantly impact small logistics companies reliant on these vehicles for their operations. Compact vans traditionally offered a balance of affordability, maneuverability, and sufficient cargo capacity suitable for small-scale logistics operations. With manufacturers shifting focus to larger commercial vehicles, such as pickups and SUVs, smaller logistics firms may face challenges in finding affordable alternatives that meet their specific needs without exceeding their budgets. Furthermore, the concerns over the limited driving range of electric LCVs pose a significant barrier to their widespread adoption and sales. Potential buyers, especially in sectors requiring extensive daily mileage or irregular routes, may hesitate due to range anxiety. The need for frequent charging and potential downtime during longer trips can disrupt operational schedules and increase perceived risks and costs. Moreover, insufficient charging infrastructure exacerbates these concerns, limiting the practicality of electric LCVs for businesses operating in diverse or remote locations.

The market has a significant opportunity to grow owing to partnerships with logistics and delivery companies. As e-commerce continues to boom across Canada, these companies are constantly seeking efficient and cost-effective ways to transport goods. LCV manufacturers can capitalize on this trend by developing vehicles tailored to the specific needs of these businesses. For instance, in March 2022, GoFor, North America's major sustainable delivery company, partnered with Odin Automotive to launch a new last-mile commercial electric vehicle (EV) delivery platform in the U.S. and Canada. This preferred partnership is expected to deploy Odin’s electric delivery vehicle ecosystem, providing GoFor with a turnkey solution for electric deliveries. The agreement secures GoFor's access to Odin's electric light commercial vehicles (eLCVs), which are known for their proven reliability and uptime over the past seven years, with more than 20,000 units already in operation. Such collaboration is expected to lead to long-term contracts and a steady stream of orders, providing stability in the market.

The Canada light commercial vehicle market is segmented on the basis of vehicle type, propulsion, application, and domain. By vehicle type, it is divided into pickup truck, light trucks, and others. By propulsion, it is classified into ICE, electric, and hybrid. Depending on application, it is categorized into commercial use, and industrial use. By domain, it is divided into Construction, Utility, Retail, Healthcare, Agriculture, Food & Beverage, Telecommunication, Automotive, Forestry, and Others. Some leading companies profiled in the report include Ford Motor Company, Mercedes-Benz Group AG, Nissan Motor Co., Ltd., GMC, FCA US LLC (Stellantis), Toyota Canada Inc., Isuzu Commercial Truck of Canada, Inc., Honda Canada Inc., GreenPower Motor Company Inc., and Lion Electric Co.

Segment Review

The Canada light commercial vehicle market is segmented on the basis of vehicle type, propulsion, application, and domain. By vehicle type, it is divided into pickup truck, light trucks, and others. By propulsion, it is classified into ICE, electric, and hybrid. Depending on application, it is categorized into commercial use, and industrial use. By domain, it is divided into Construction, Utility, Retail, Healthcare, Agriculture, Food & Beverage, Telecommunication, Automotive, Forestry, and Others.

By Vehicle Type

On the basis of vehicle type, the others segment generated maximum revenue in 2023. The others segment, encompassing minivans, minibus, buses & coaches, is poised to increase the sales in upcoming years as these vehicles serve diverse transportation needs beyond traditional, commercial and personal use, including tourism, public transit, and specialized transportation services. Additionally, the versatility of minivans and minibuses appeals to various sectors such as schools, airports, and healthcare, where mobility and passenger comfort are critical. As consumer preferences shift towards multi-purpose vehicles offering spacious interiors and enhanced safety features, the others segment stands to capitalize on evolving market demands and regulatory incentives promoting sustainable transportation options.

For instance, in June 2022, Karsan unveiled the e-Jest minibus featuring a BMW-manufactured electric motor delivering 170 HP and 290 Nm torque. It offers a choice between BMW-made 44 kWh and 88 kWh batteries. The minibus boasts modern amenities including a 10.1-inch touchscreen infotainment display, a fully digital instrument cluster, keyless start, USB ports, and optional Wi-Fi compatibility, catering to enhanced passenger convenience and connectivity.

By Propulsion

On the basis of propulsion, the ICE segment generated maximum revenue in 2023, as it has an established infrastructure supports widespread availability of gasoline and diesel fuel, ensuring convenient refueling options across Canada. Additionally, advancements in ICE technology have led to improved fuel efficiency, reduced emissions, and enhanced performance, appealing to cost-conscious consumers and fleet operators alike. Moreover, the lower upfront costs and familiarity with traditional engine technologies continue to bolster consumer confidence in ICE vehicles, maintaining their strong market presence amidst evolving regulatory landscapes and growing competition from electric and hybrid alternatives.

By Application

On the basis of application, the commercial use segment generated maximum revenue in 2023 due to increasing demand from industries such as logistics, construction, and services. Commercial vehicles are essential for transporting goods and personnel, facilitating economic activities and infrastructure development. Moreover, rising e-commerce activities and urbanization have spurred demand for efficient last-mile delivery solutions, further driving sales in the commercial segment. As businesses expand their fleets to meet growing consumer expectations and operational demands, the commercial use of vehicles continues to be a robust driver of market growth.

By Domain

On the basis of domain, the retail segment generated maximum revenue in 2023, owing to increased consumer spending, expansion of retail outlets, and the need for reliable transportation of goods to meet customer demand. Retailers rely heavily on light commercial vehicles for logistics and delivery operations, ensuring timely and efficient supply chain management. The growth of online shopping has further propelled demand for LCVs in retail, as businesses prioritize quick and flexible delivery services to maintain competitiveness in the digital marketplace. These factors underscore the retail sector's pivotal role in driving sales and market expansion for light commercial vehicles.

Competitive Analysis

The key players profiled in the Canada light commercial vehicle market include Ford Motor Company, Mercedes-Benz Group AG, Nissan Motor Co., Ltd., GMC, FCA US LLC (Stellantis), Toyota Canada Inc., Isuzu Commercial Truck of Canada, Inc., Honda Canada Inc., GreenPower Motor Company Inc., and Lion Electric Co.

Rise of e-commerce and the need for efficient last-mile delivery

The rapid growth of e-commerce in Canada is a major driver for the LCV market. With rise in the number of consumers preferring to shop online, the demand for efficient last-mile delivery services has surged. E-commerce giants such as Amazon, along with numerous local online retailers, require a reliable and efficient logistics network to meet the growing delivery needs. This demand is particularly high for light commercial vehicles, which are well-suited for navigating urban environments and making multiple deliveries per day.

During the COVID-19 pandemic, the reliance on online shopping intensified, highlighting the critical role of LCVs in the supply chain. Companies adapted this quickly to the increased volume of home deliveries, and LCVs provided the flexibility and efficiency required for this task. For instance, in March 2023, Canada Post introduced its first depot featuring battery-electric corporate delivery vehicles, marking a significant step in its effort to transition to a sustainable last-mile fleet. Located in Nanaimo, the depot utilized 14 fully electric cargo vans for collection and delivery services, replacing traditional internal combustion vehicles. This initiative is part of Canada Post's ambitious plan to achieve net-zero emissions by 2050. Canada Post aims to electrify 50% of its national fleet, totaling approximately 14,000 vehicles, by 2030, with the goal of fully electrifying its entire fleet by 2040. Such development further supports the LCVs for the last mile delivery. Hence, the expansion in e-commerce industry across the Canada is anticipated to drive growth of Canada light commercial vehicle (LCV) market during the forecast period.

Surge in adoption of green logistics

The increasing emphasis on sustainability and environmental responsibility is driving the adoption of green logistics practices in Canada. This shift is significantly influencing the light commercial vehicle (LCV) market as businesses seek to reduce their carbon footprints and comply with stricter environmental regulations. Companies are increasingly investing in electric and hybrid LCVs to align with these green logistics initiatives. Many companies in Canada are embracing corporate sustainability initiatives, which include adopting green logistics as part of their overall strategy. Large corporations, particularly those with extensive logistics and delivery networks, are leading the way in integrating electric LCVs into their fleets to reduce emissions. For instance, in June 2023, FedEx Express Canada introduced its first 50 BrightDrop Zevo 600 electric delivery vehicles. This move marks a significant step towards the company's goal of converting its entire parcel pickup and delivery fleet to all-electric, zero-tailpipe emissions vehicles by 2040. These initial electric vehicles (EVs) will be deployed in Toronto, Montreal, and Surrey, with plans to expand the EV fleet as more charging infrastructure is installed at FedEx locations across Canada.

Moreover, companies are increasingly aware of the reputational benefits associated with green logistics. Consumers and business partners are more likely to support brands that demonstrate a commitment to environmental sustainability. This shift in consumer preference is driving businesses to adopt green logistics practices, including the use of LCVs with lower emissions. Thus, rise in the adoption of green logistics is a significant driver for the Canada light commercial vehicle market.

High initial costs to limit the sales

The upfront cost of purchasing a new LCV is a major hurdle for many Canadian businesses, especially small and medium-sized enterprises. These vehicles often represent a significant investment, and with economic uncertainties, many companies are hesitant to commit to such large expenditures. The trend towards more technologically advanced and fuel-efficient LCVs, while beneficial in the long run, has driven up initial costs even further. This situation can lead to businesses holding onto their older, less efficient vehicles for longer periods, slowing down fleet renewals. Moreover, the high purchase prices can make it challenging for new businesses to enter markets that require LCVs, potentially stifling competition, and innovation in various sectors.

Stringent emission norms

Canada's tough stance on vehicle emissions poses a significant challenge for the light commercial vehicle (LCV) market. The government has set ambitious targets to reduce greenhouse gas emissions, putting pressure on manufacturers to produce cleaner vehicles. This push for greener technology often leads to higher production costs, which are typically passed on to consumers. Small businesses, which make up a large portion of LCV buyers, may find it difficult to afford these more expensive, eco-friendly models. Also, some popular LCV models might need to be redesigned or even discontinued if they cannot meet the new standards. This situation can limit choices for buyers and potentially disrupt established business operations that rely on specific vehicle types.

Collaboration with Logistics and Delivery Companies

The Canada light commercial vehicle (LCV) market has a significant opportunity to grow owing to partnerships with logistics and delivery companies. As e-commerce continues to boom across Canada, these companies are constantly seeking efficient and cost-effective ways to transport goods. LCV manufacturers can capitalize on this trend by developing vehicles tailored to the specific needs of these businesses. For instance, in March 2022, GoFor, North America's major sustainable delivery company, partnered with Odin Automotive to launch a new last-mile commercial electric vehicle (EV) delivery platform in the U.S. and Canada. This preferred partnership is expected to deploy Odin’s electric delivery vehicle ecosystem, providing GoFor with a turnkey solution for electric deliveries. The agreement secures GoFor's access to Odin's electric light commercial vehicles (eLCVs), which are known for their proven reliability and uptime over the past seven years, with more than 20,000 units already in operation. By working closely with logistics firms, LCV makers can also gain valuable insights into real-world usage patterns, allowing them to refine their designs and create more appealing products. This collaboration is expected to lead to long-term contracts and a steady stream of orders, providing stability in the market.

Recent Developments in the Canada Light Commercial Vehicle Industry

• In July 2022, Mercedes-Benz Canada Inc. partnered with Enterprise Holdings, the vehicle rental business industry to deliver 300 units in total, including 200+ MY22 Sprinter Cargo Vans and 100+ MY22 Metris Passenger Vans. Mercedes-Benz Vans Canada provides Enterprise Holdings with an all-inclusive customer service experience, from customizable upfitting options to aftersales support.
• In April 2022, GMC started commercial electric vehicle manufacturing hub at its CAMI automotive assembly plant in Ingersoll, Ontario, Canada by investing $2,000 million. GM's investment supported by $259 million in funding from the governments of Canada and Ontario. Across its global footprint, GM is planning to introduce 30 new EV models by 2025, eliminate tailpipe emissions from new light-duty vehicles by 2035 and become carbon neutral by 2040.
• In May 2024, GreenPower Motor Company Inc. launched an all-electric refrigerated truck for mid and last-mile delivery in Canada. This all-electric refrigerated truck serves the needs of customers looking for a cold-chain transportation solution for middle and last-mile delivery.
• In February 2024, Mercedes-Benz Canada Inc. launched eSprinter, a fully electric cargo van with emission-free, battery-electric features. In addition, it offers customers a multitude of technical innovations that make driving and fleet logistics more convenient and sustainable. The allnew base model eSprinter is available for order at an all-inclusive cash selling price of $107,273.
• In February 2021, Mercedes-Benz Canada Inc. launched 4-Cylinder Diesel Sprinter for the Canadian market. The 4-cylinder diesel engine can be combined with a rear-wheel drive configuration with various wheelbase options, including the 144" wheelbase standard roof or the 170" wheelbase and 170" extended wheelbase high roof offering. The 4-cylinder diesel engine joins the 6-cylinder diesel and the 4- cylinder gasoline engine, rounding out the comprehensive Sprinter engine lineup for a total of three different powertrain options.

Key Benefits for Stakeholders

• This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the Canada light commercial vehicle market analysis from 2011 to 2030 to identify the prevailing Canada light commercial vehicle market opportunities.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the Canada light commercial vehicle market segmentation assists to determine the prevailing market opportunities.
• Major countries in each region are mapped according to their revenue contribution to the market.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes the analysis of the market trends, key players, market segments, application areas, and market growth strategies.

  Canada light commercial vehicle Market Report Highlights