Volume - Trucks
Sales volume refers to the total quantity or number of trucks sold by a company within a specific period.
Guide to Commercial Vehicles Industry KPIs
This guide highlights the key performance indicators for the commercial vehicle industry and where investors should look to find an investment edge. While this guide is not a fully integrated commercial vehicle industry primer, as the market leader in granular consensus estimates data, Visible Alpha works with partners and clients to determine the key performance indicators in the industry. This guide will aid market participants in identifying industry KPIs and the potential future performance of commercial vehicle companies, by region and service type.
Industry Business Model
Revenue
Commercial vehicle manufacturers generate revenue through three primary streams: direct sales of commercial vehicles, financial services, and service-based offerings tailored for logistics, transportation, and industrial clients. Commercial vehicle sales form the largest portion of revenue, encompassing the production and sale of trucks, buses, and other commercial vehicles. Revenue is driven by sales volume and the average selling price (ASP), both critical metrics that reflect the pricing strategy and market demand. Tracking ASP and volume helps companies gauge revenue trends and adjust pricing, production, and marketing for improved profitability.
Revenue from vehicle sales is calculated as the product of unit volumes and ASP. Alternatively, the revenue generated from the production and sales of trucks and buses can be added together to calculate the revenue of the commercial vehicle segment.
Both truck revenue and bus revenue are determined by multiplying their respective ASPs with the volume or units of trucks and buses sold. Here, ASP measures the average price at which commercial vehicles (trucks and buses) are sold during a given period while volume measures the number of commercial vehicles sold during a given period.
It is important to note that volume, which represents the actual number of vehicles produced during a specific period, may not always align perfectly with the number of units sold. However, there can be a difference between the two.
Beyond vehicle sales, financial services represent a significant revenue stream. Through in-house financing and leasing, companies earn interest and fees while offering added value to customers. In addition to financing, the financial services segment may also offer insurance products, such as vehicle warranties, GAP (guaranteed asset protection) insurance, and liability insurance. This provides additional revenue streams and allows auto manufacturers to offer a one-stop-shop experience for their customers. The financial services segment is highly regulated and subject to various laws and regulations that commercial vehicle manufacturers must comply with, depending on where they operate.
After-sales services, including maintenance, repairs, and spare parts, further bolster revenue. These offerings are supported by extensive networks of authorized service centers and create opportunities for upselling extended warranties, accessories, and other add-ons. By fostering customer loyalty, after-sales services help manufacturers establish long-term revenue streams.
Commercial Vehicles Industry Business Models
CLICK DIAGRAMS TO EXPAND
Expenses
The commercial vehicles industry is highly capital- and labor-intensive, with significant costs tied to manufacturing, regulatory compliance, R&D, and digital transformation. Key expense categories include:
- Selling, general, and administrative (SG&A) expenses: These expenses vary by company, and may also depend on the company’s size, revenue, and target market. The industry’s move toward electrification, autonomous technology, and sustainability brings additional costs and complexity.
- Research and development (R&D) expenses: R&D investments are critical for maintaining competitive advantage. They enable manufacturers to innovate, meet evolving market demands, and comply with stringent environmental and safety standards.
Profitability
Profitability in the commercial vehicles industry hinges on operational efficiency and strategic cost management, particularly in navigating the capital-intensive nature of the business. Key metrics include:
- Operating profit margin (EBIT margin): This margin reflects the company’s ability to generate profits from core operations relative to revenue.
- EBITDA margin: Offers a view of operating performance by excluding non-cash and interest-related expenses.
- Return on assets (ROA): Assesses how effectively the company utilizes its assets to generate profit.
- Return on equity (ROE): Evaluates profitability relative to shareholders’ equity, indicating how well equity capital is deployed.
- Return on invested capital (ROIC): Measures the company’s ability to generate returns on its total invested capital, encompassing both debt and equity.
Key performance indicators (KPIs) are the most important business metrics for a particular industry. When understanding market expectations for the commercial vehicle industry, whether at a company or industry level, some KPIs to consider include:
Visible Alpha’s Standardized Industry Metrics
To understand market expectations for the commercial vehicle industry, a key information source is sell-side analyst estimates and consensus forecast data. The buy-side, sell-side, and public companies leverage this type of data to conduct competitive analysis, a type of analysis conducted by professional analysts that involves comparing standardized metrics of one company with those of similar companies. Because companies report metrics differently – and sometimes report on different metrics altogether – standardizing the key metrics for each company can be a cumbersome process.
Visible Alpha Insights includes analyst data, company data, and industry data at a level of granularity unparalleled in the market. Our industry data – Standardized Industry Metrics – enables market participants to quantify and compare market expectations for companies across 150+ industries.
Data as of December 09, 2024
20
Global Tickers
248
Current Analyst Excel Models
250
Proprietary line items in our standardized operating metrics data
89
Contributing Brokers
491
Total standardized line items
241
Unique Line Items In Our Standardized Financials Data
Visible Alpha offers 13 commercial vehicle-related comp tables, comparing forecasts for key financial and operating metrics, to make it easy to quickly conduct relative analysis. Every pre-built, customizable comp table is based on region, sub-industry, or key operating metrics.
NORTH AMERICA
- Inc (NASDAQ: PCAR)
- Wabash National Corporation (NYSE: WNC)
- NFI Group Inc (TSE: NFI)
- Workhorse Group Inc (NASDAQ: WKHS)
EMEA
- Volvo AB (STO: VOLV-B)
- Daimler Truck Holding AG (ETR: DTG)
- Traton SE (ETR: 8TRA)
- Iveco Group N.V (BIT: IVG)
- Ebusco Holding N.V. (AMS: EBUS)
APAC
- Sinotruk (Hong Kong) Limited (HKG: 3808)
- Zhengzhou Yutong Bus (SHA: 600066)
- Hino Motors (TYO: 7205)
- Ashok Leyland (NSE: ASHOKLEY)
Industry KPI Terms & Definitions
Visible Alpha offers an innovative, integrated experience through real-time, granular consensus estimates and historical data created directly from the world’s leading equity analysts. Using a subset of the below KPIs, this data can help investors hone in on the key drivers of companies to uncover investment opportunities.
Sales Volume
Sales volume refers to the total quantity or number of commercial vehicles sold by a company within a specific period.
ASP – Commercial Vehicles
ASP – Commercial vehicles refers to the average selling prices of commercial vehicles. ASP is calculated by dividing the total revenue generated by the sales of commercial vehicles by the total number of commercial vehicles sold during a given period.
Total Revenue – Commercial Vehicles
Total revenue – Commercial vehicles refer to the total revenue generated from the sales of commercial vehicles during a given period. This includes the revenue generated from selling all types of commercial vehicles, such as buses and trucks.
Total Revenue – Financial Services
Total revenue – Financial services refer to the revenue generated from providing financing, leasing, and other financial services related to the sale of commercial vehicles. This revenue is often reported separately from the revenue generated from the sale of vehicles themselves.
Return On Equity
Return on equity (ROE) is calculated by dividing the net income of the company by its average shareholders’ equity. ROE measures the profitability and efficiency of a company in generating profits from the shareholders’ equity investment.
Debt / Equity
Debt / Equity is used to assess the relative proportion of debt and equity financing used by commercial vehicle manufacturers. It is calculated by dividing the total debt of a company by its total equity. A higher debt-to-equity ratio indicates a higher proportion of debt, which may imply higher financial leverage and risk. A lower debt-to-equity ratio suggests a larger proportion of equity financing, which may indicate a more conservative financial position.
Operating Income/(Loss)
Operating income/(loss) provides a measure of the profitability of a commercial vehicle manufacturer business, which includes the production, distribution, and sale of commercial vehicles. Operating income provides a measure of a company’s profitability from its core operations.
Operating Margin
Operating margin or EBIT margin measures the profitability of commercial vehicle manufacturers’ core operations, after deducting operating expenses.
EBITDA Margin
EBITDA margin helps assess the profitability and operational efficiency of commercial vehicle manufacturers. It measures the proportion of a company’s revenue that is converted into earnings before interest, taxes, depreciation, and amortization (EBITDA). EBITDA margin is calculated by dividing EBITDA by total revenue and expressing the result as a percentage.
Download this guide as an ebook today:
Guide to Commercial Vehicles Industry KPIs for Investment Professionals
This guide highlights the key performance indicators for the commercial vehicles industry and where investors should look to find an investment edge, including:
- Commercial Vehicles Industry Business Model & Diagram
- Key Commercial Vehicles Industry Metrics PLUS Visible Alpha’s Standardized Industry Metrics
- Available Comp Tables
- Industry KPI Terms & Definitions
Contact Us
For more information, or to request data, fill out this form.
