1130-1215 Robinet North American Light Vehicle … – 25 Growth Volume, CAGR% IHS Automotive |...
Transcript of 1130-1215 Robinet North American Light Vehicle … – 25 Growth Volume, CAGR% IHS Automotive |...
© 2015 IHS
Presentation
ihs.com
IHS AUTOMOTIVE
Global Light Vehicle Forecast:Readying For The Next StageOctober 15, 2015
Michael Robinet, Managing Director, IHS Automotive Advisory
Contents
© 2015 IHS 3
• Economic Update
• Structural Factors Drive a Next Stage
• Industry Implications
IHS Automotive | October 2015
The “Great Divergence” Emerges
• Over the past four years global growth has been remarkably stable –between 2.5% and 3.0% …
• … Despite “rolling routs” in financial and commodity markets.
• However, the composition of growth has changed fundamentally – with a gradual growth acceleration among the advance economies and a sharp deceleration in the emerging world.
• Four trends have driven this divergence:
• Debt and deleveraging.
• The plunge in the price of oil and other commodities.
• Central banks moving on different paths.
• The rise of the dollar and the fall in other currencies.
4
IHS Automotive | October 2015
© 2015 IHS
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NAFTA OtherAmericas
WesternEurope
EmergingEurope
Mideast-N.Africa
Sub-Saharan
Africa
Japan Other Asia-Pacific
Ann
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erce
nt c
hang
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2013 2014 2015 2016 2017-21
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Asia-Pacific (excluding Japan) and Sub-Saharan Africa will achieve the fastest growth in real GDP
IHS Automotive / October 2015
Real GDP
Source: IHS © 2015 IHS
© 2015 IHS 6
US crude oil prices: A big drop – but for how long?IHS Automotive / October 2015
Crude oil and natural gas prices
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Crude oil, WTI (Left scale) Natural gas, Henry Hub (Right scale)
Source: IHS Energy © 2015 IHS
© 2015 IHS 7
IHS Automotive / October 2015
Exchange rates per US dollar
Quarterly averages
Canadian dollar
Japanese yen
Euro
Chinese renminbi
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0.8
1.0
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1998 2001 2004 2007 2010 2013 20160.2
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1998 2001 2004 2007 2010 2013 2016
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1998 2001 2004 2007 2010 2013 201640
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© 2015 IHS
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1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Perc
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Real GDP Real domestic demand
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China’s economic growth will downshift in the long runIHS Automotive / October 2015
Real GDP
Source: IHS © 2015 IHS
Contents
© 2015 IHS 9
• Economic Update
• Structural Factors Drive a Next Stage
• Industry Implications
IHS Automotive | October 2015
© 2015 IHS 10
Global Light Vehicle Sales ForecastMarket now flat in 2015, but weakness in emerging markets only temporary
IHS Automotive | October 2015
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2021
2022
Mill
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Mature Markets China Emerging Markets
Market Growth2009-'12 2012-'15 2015-'22
Mature 10% 12% 1%China 43% 26% 34%
Emerging 39% -12% 48%
Global sales remain at 86 million in 2015, but economic improvement will lift market 2% next year;
long-term prospects unchanged – 100m in 2020.
Source: IHS Automotive
© 2015 IHS 11
Mature Markets LV Sales ForecastReplacement demand is key driver – loyalty critical to OEMs
IHS Automotive | October 2015
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LV Sales Forecast (millions, 2005 – 2022)
Source: IHS Automotive
© 2015 IHS 12
Emerging Markets LV Sales ForecastRecent declines only temporary – fundamentals remain positive
IHS Automotive | October 2015
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ASEAN Central Europe East Europe IndianSubcontinent
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South America
LV Sales Forecast (millions, 2005 – 2022)
Source: IHS Automotive
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Global Light Vehicle ProductionGlobal Growth Takes a Turn
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27million
16million
11.3, 3.8%
7.1, 6.1%
3.9, 1.6%
1.7, 0.8%
1.1, 4.1%
1.1, 2.3%
-1.2, -0.8%
-2 0 2 4 6 8 10 12
China
S Asia
EU
NA
MEA
S Amer
Jap/Kor
Millions
2014 – 25 GrowthVolume, CAGR%
IHS Automotive | October 2015
10million
Bodytypes and Segments Shifting Legislation, Global Platforms and Consumer Desires
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2000
2020
13%
27%
22%
7%
11%
9%
11%25%
28%18%
7%
8%
6%
8% SUV27%
Sedan27%
Hatchback19%
Van7%
MPV7%
Pickup6%
Other7%
6%
18%
26%17%
10%
23%
6%
21%
32%
17%
7%
17%
A6%
B25%
C31%
D16%
E6%
Full-Frame16%
20052015
2025
Global BodyType Share Global Production Segment Share
SUV has doubled since 2005 to be the predominant bodytype – global platforms
• Full-Frame share declines to to NA• B, C & D account for ~72% by 2025
IHS Presentation | October 2015
2005 2015 2025
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Global Engine Production by Cylinder Count
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Global Engine OutputSub 2.0L totals to 66% of the Market
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Global Engine Production by Displacement
0L 0.1-0.9L 1-1.9L 2-2.9L 3-3.9L 4-4.9L 5L+
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2025
52%
66%62%
<2.0L
IHS Presentation | October 2015
By 2025, 71% of powertrains will have some level of electrification
51%44%
.
…
44%
35%
12%
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27%
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Global Transmission Type by Share
Manual Auto CVT DCTEVT Reduction AMT IVT
TransmissionVolume Stable, Greater Speeds
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84% 93%
IHS Presentation | October 2015
Global Program Launches by RegionIncreased Launch Activity Raises Risk
© 2015 IHS
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Increased industry pace places pressure on talent, resources and infrastructure.
IHS Automotive | October 2015
77%17%
3%3% Det 346%
Asian 438%
Germ 311%
Other5%
NAFTA Production Share
NAFTA ProductionCustomer Mix is Changing….
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• German OEMs growing faster than Asian 4 and ‘Other’ OEMs.
• Detroit 3 may actually decline due to lack of capacity and competitors shifting of imported offerings to NA output.
IHS Automotive | October 2015
-53%
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2015-25 CTG
US LV SalesPent-Up Demand Declines and Affordability Impacts Towards 2020
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17.016.616.2
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17.717.517.317.117.1
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IHS Presentation | October 2015
• Affordability crests with wealth effect• Credit availability at a peak• Legislation drives increased cost into the fleet• Employment growth and vehicle age supports
NA Light Vehicle Production
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15.815.315.1 12.6
8.611.9
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NA Production Underutilized Capacity % Utilization
IHS Presentation | October 2015
• Production Co-Location• Exports• Global Production Flexibility
Bodytypes and Segments Shifting to Legislation and Consumers
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2020
17%
36%22%
2%
10%
7%6% 31%
35%
18%
1%
6%
4%5%
SUV36%
Sedan34%
Pickup15%
Hatchback6%
MPV3%
Coupe2%
Other4%
2%18%
22%
17%
41%
2%
24%
32%
16%
26%
B-Segment7%
C-Segment27%
D-Segment34%
E-Segment12%
Full Frame20%
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20002010
2020
NA BodyType Share NA Production Segment Share
SUV has doubled since 2000 to be the predominant bodytype – global platforms
• Full-Frame share is cut in half• B, C & D account for ~70% by 2020
IHS Presentation | October 2015
Three Distinct NA Production Clusters Coexist
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Great Lakes
Mid-Mexico
Southeast
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• Great Lakes driven by installed capacity shifting to 3 crew/3 shift structures to reach +7 million units
• Southeast reaching a formidable level of +5 million units by 2017 with virtually every NA OEM resident
• Mid-Mexico rises to ~4 million units by 2022 as new capacity, diversified demand and supplier investment act as enablers
© 2015 IHS
IHS Presentation | October 2015
NAFTA Program Launches by Country
© 2015 IHS
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IHS Presentation | October 2015
CAFE and GHG Standards - Significant Hurdles Ahead• US targets are based on Model Year and Footprint
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Source: EPA
Technology required to meet stiffening standards will be
passed through to the consumer – OEMs and suppliers that
effectively navigate this technology maze will benefit.
IHS Automotive | October 2015
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10987654321
Build Process Change /All-New Architecture
Integrate new build processes due to platform consolidation, increased flexibility and need to integrate new materials.
All-New/ Major Platform, Powertrain Packaging
All-new dimensions, locations points, powertrain packaging/fitments & suspension/ chassis structures.
Moderate Revision/Mid-cycle Enhancement
New interior/exterior styling, add bodystyles, significant trim levels and new/major powerteams changes.
Exterior Modifications & Electronic Changes
Exterior lighting, front/rear fascia trim, interior electronic content, software revisions, incremental electronic content.
The New Cadence 10 – 5 – 2.5 – 1 Increased Speed & Intensity Impacts Launch Requirements
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IHS Automotive | October 2015
Material Forecast AnalysisTotal NA LV Industry By Pounds
• Growing total volume in NA 17.0 Mil to 19.0 Mil +12%• Aluminum with a scrap allowance rises to ~1.6 Bil lbs• Steel declines in larger segments – shift to Al
Pounds
IHS Automotive | October 2015
27
Material Forecast AnalysisFull-Size Full Frame Industry By Pounds
Pounds
IHS Automotive | October 2015
Launch Performance in the Spotlight
• Cadence is over 25% faster and competition more intense
• Highest content and most profitable versions are earliest in the cycle
• Integration of new materials/systems into the build process
• Launches curves need to improve:
• 7-year cycle – loss of ~2.0% of total cycle volume
• 5-year cycle – same launch curve – loss of ~3.5% of volume
• Quantifiable capacity & tier 2 & 3 readiness is critical
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Volume Gross Profit
Bill
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Major Program Launch Loss
No Launch LossIdeal Launch LossActual Launch Loss
OEM should have lost
~several mil during the launch, it
instead lost ~ 2X the
expected
Inst
ead
of lo
sing
1.9
% o
f tot
al
cycl
e vo
lum
e, O
EM lo
st 3
.9%
IHS Automotive | October 2015
© 2015 IHS 29
Worldwide V2X market forecast – Expected Scenario
Worldwide V2X Regional Share Forecast – Expected Scenario
© 2015 IHSSource: IHS
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#M
USA Western Europe Japan South Korea Rest of World
IHS Automotive | October 2015
Level 0-5 Driving automation expands with technology, legislation and
consumers demands. V2V & V2I rise exponentially after 2020.
Contents
© 2015 IHS 30
• Economic Update
• Structural Factors Drive a Next Stage
• Industry Implications
IHS Automotive | October 2015
© 2015 IHS
• OEM Consolidation Drivers• Scale economies
• Legislative compliance
• Tariff and non-tariff protections eliminated
• Lack of demand diversification, capital, supplier alliances and technical capability
• Capital (ROE) and production utilization is below average
• Candidates: • Most Chinese OEMs with SOE ownership
• Regional’ OEMs without appreciable volume in major segments or under intense
competitive pressures from larger players
• Regional OEMs serving divergent markets – lacking the ability to consolidate platforms,
build processes
• OEMs with ownership lacking a viable long-term vision
OEM & Supplier ConsolidationThe Post-2009 Free Ride is Over – The Next Stage Has Arrived
31
IHS Automotive | October 2015
© 2015 IHS
• Supplier Consolidation Drivers• Lack of global production or R/D scale to match platform footprints
• Lagging technology amidst a faster cadence
• Lack of a liable supply base
• Risk aversion – HR, capital & technology (I/P)
• Inability to achieve adequate ROE levels, ownership motivations
• Sector Candidates: • Regional tier 1 and tier 2 players focused on global platforms
• Those without appropriate global capabilities and relationships
• Areas under intense competition with high process turnover and shorter lifecycles
• Those focused on few customers with high demand variability
• Suppliers with ownership structures with shorter horizons/goals (PE/Family)
OEM & Supplier ConsolidationThe Post-2009 Free Ride is Over – The Next Stage Has Arrived
32
IHS Automotive | October 2015
© 2015 IHS
• Volumes flattening in several markets• Japan/Korea, North America and Europe grow below global trend
• Cadence is faster – challenging for Tier 2 & 3 regional suppliers• Increased complexity coupled with shorter cycles
• Launch readiness is critical• OEMs focus on optimization of early cycle volume
• Increased NA non-D3 capacity – new suppliers emerge• Global platforms, architectures increasing
• Ability to design and manufacture in key markets differentiates
• OEMs increasing pressure on suppliers for cost control• ‘One Cost’ models, APRs and enhanced oversight of purchased materials
• Exposure to China, South America and Russia raises pressure on other markets
An Inflection PointThe New Mantra ‘Launches, Logistics & Capacity’
33
IHS Automotive | October 2015
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Thank You
Michael RobinetManaging Director, IHS Automotive Advisory [email protected]