Asia’s automotive market updates and outlook... · Some countries like India which have seen the...
Transcript of Asia’s automotive market updates and outlook... · Some countries like India which have seen the...
Asia’s automotive market updates and outlook
Dr. Marco H. Hecker | Chief Strategy Officer Deloitte ChinaAutomechanika, July 6th 2020
Deloitte State of the Consumer TrackerCopyright © 2020 Deloitte Development LLC. All rights reserved. 2
Global light vehicle sales headed for double-digit declines this year. Some Governments have released major stimulus measures in an effort to boost vehicle demand.
• Global light vehicle sales expected to be down by 22% in 2020 due to the spread of the COVID-19 virus, lockdown measures, and a resulting slowdown in the global economy.
• Significantly higher decline than - 8% during 2008/09 fin. crisis
Varying government stimulus packages :
• China: NEV subsidy; 0% NEV purchase tax are extended beyond 2020; Delay of “China 6” until Jan 2021; lower auto finance down payment, lower interest rate as well as extended auto loan terms; Encouragement to scrap 1 mil “China 3” (and older) diesel trucks
• Japan: USD1trn general stimulus- policies directed towards businesses/ employment security. Earmarked $2.2 bn to help OEMs shift production from CN to stabilize supply chains
• India: No direct Stimuli for Auto Sector. Gov. announced packages for Micro, Small and Medium Enterprises. Tier2 and some Tier 1 suppliers will benefit from the gov. soft loans. Also EMI moratorium from March’20 till Aug’20 with “6 months interest payment holiday”*)
Sales forecasts
Source: IHS Markit, Reuters *) interest will continue to accumulate
89.7
70.1
78.0
-4.0%
-21.9%
11.3%
-25%
-20%
-15%
-10%
-5%
0%
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15%
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2019 2020F 2021F
Annual %
change
Vehic
le U
nits (
Millions)
Global light vehicle salesand growth (2019-2021F)
Global sales % change
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COVID-19 wreaks havoc on Asia’s automotive industry; the high uncertainty of the pandemic signals demand will be slow to recover
Source: IHS Markit, Reuters *) interest will continue to accumulate. Note1: All types of vehicles; IHS, CAAM, JAMA, FCAI, TAIA, TAIAI, MAA, LTA, VAMA, CAMPI, Deloitte research & analysis
2020 Monthly Vehicle1 Sales by Markets
1,927 310
1,430 2,070 2,194
360 430 581
270 218
338 310 156
0
278
56 62 61 27 42
349 338 292 134 154
China
Japan
India
AUS
SEA
Jan Feb Mar Apr May
2020E2018 2019 2021E 2022E 2023E
24.827.1
-13%
-20%
-32%
-18%
2020E2018 2019 2021E 2022E 2023E
5.1 4.54.2 4.64.65.2
2020E2018 2019 2021E 2022E 2023E
2020E2018 2019 2021E 2022E 2023E
2020E2018 2019 2021E 2022E 2023E
-37%3.5
2.72.2
3.43.14.0
1.0 0.90.81.00.91.1
3.42.72.3
3.33.03.4
23.421.525.924.7
Light Vehicles Sales Forecast (2018-2023)in k units in mn units
Deloitte State of the Consumer TrackerCopyright © 2020 Deloitte Development LLC. All rights reserved. 4
Collective anxiety has started to ease in a majority of global markets, but navigating the re-opening is critical.
Q3: To what extent do you agree or disagree with the following statements?
• Net consumer anxiety has receded across many countries compared to the mid-April timeframe. One of the likely reasons is the cautious reopening of economies .
• Some countries like India which have seen the pandemic hit later than other countries continue to show higher levels of net anxiety while countries that have relaxed their stay-at-home orders more widely have seen some reduction in the overall level of consumer anxiety.
• However, it remains to be seen whether this trend will continue given a growing number of medical officials pointing to the looming specter of a second wave of virus.
“I’m more anxious than I was last week” (Net Anxiety*)
Note: * Net anxiety = (% agree) – (% disagree); ** countries were not part of wave 1 fielding period.
-37%
-30%
-27%
-13%
-12%
-11%
-7%
-7%
-5%
-5%
-5%
-4%
-3%
-2%
-2%
5%
20%
31%
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
G e r m a n y
N e t h e r l a n d s
J a p a n
B e l g i u m *
C a n a d a
F r a n c e
A u s t r a l i a
I r e l a n d *
P o l a n d *
S o u t h K o r e a
I t a l y
U K
C h i n a
U S
S p a i n
M e x i c o *
C h i l e *
I n d i a
State of the Consumer Tracker
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Demand recovery in several markets may be stunted by a consumer intention to keep existing vehicles longer.
IN CL PL CN MX IE ES KR JP AU IT FR US CA UK BE DE NL
Wave 4 79% 64% 67% 61% 57% 56% 61% 55% 57% 56% 49% 48% 53% 44% 47% 39% 34%
Wave 5 82% 70% 65% 65% 63% 58% 56% 63% 48% 54% 56% 51% 47% 53% 45% 44% 40% 36%
Wave 6 76% 71% 68% 67% 62% 61% 60% 59% 55% 54% 53% 50% 50% 50% 49% 46% 45% 32%
0%
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Q3: To what extent do you agree or disagree with the following statements?
Note: Percentage of respondents who said “agree” or “strongly agree” have been added together.
• Health concerns have largely kept consumers out of the auto retail market for several weeks.
• But, the prolonged global economic shutdown is also starting to weigh on consumer finances, causing many people to reconsider large purchases going forward.
• At least half of the vehicle owners in most countries are planning to keep their current car longer than expected, representing a significant challenge for automotive manufacturers looking to kickstart demand.
• Also, when consumers return to the market, questions remain regarding the type of vehicles people will buy (given expected affordability concerns).
“I’m planning to keep my current vehicle longer than I was originally expecting” (% agree)
State of the Consumer Tracker
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Intent to delay vehicle maintenance is mixed as some consumers divert spending to more immediate needs.
IN CN CL MX UK AU IT IE US ES FR CA DE KR PL BE NL JP
Wave 4 63% 51% 42% 28% 32% 30% 33% 26% 30% 27% 28% 19% 20% 19% 18% 15% 12%
Wave 5 79% 43% 45% 41% 25% 30% 26% 29% 25% 28% 25% 26% 17% 22% 17% 17% 13% 13%
Wave 6 67% 50% 50% 41% 28% 28% 28% 27% 25% 25% 24% 23% 19% 18% 17% 17% 14% 12%
0%
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Q3: To what extent do you agree or disagree with the following statements?
Note: Percentage of respondents who said “agree” or “strongly agree” have been added together.
• Along with concerns for their long-term financial wellbeing, consumers are also somewhat hesitant regarding near-term spending.
• Along with core questions around forward-looking demand, this represents another key challenge facing the automotive value chain, particularly dealers that rely on their aftersales business for profitability.
• Having said that, there are positive signals coming from consumers in Europe, Canada, Japan, and South Korea who are perhaps acknowledging the need to maintain their current vehicle (especially if they intend to keep it longer than expected).
“I’m putting off regular maintenance for my vehicle” (% agree)
State of the Consumer Tracker
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Over the next 6 to 24 months, we can expect sectors to be impacted by COVID-19 and experience the stages of the crisis cycle at different lengths and severity
2020 2021
Apr May June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Jul Aug
CN
KR
AU
NZ
IN
JP
SEA –VN
SEA-IND
SEA-MY
SEA-TH
SEA-SG
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
ThriveRecoverRespond
Emerging perspectives on the Auto Sector in Asia Pacific
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Highly capital/ labor intensive businesses with highly complex& globalized supply chains are hindering OEMs to transform fast.
RESPONDActions to address immediate &
short-term challenges
RECOVERActions to enable organisational recovery & adjust to
scenarios
REINVENT to THRIVEActions to position the organisation for post crisis
demand & the ‘new normal
Business performance
Workforce scenariomodelling & redesign
Workforce safety, wellbeing, policies & communications
Supply Chain Visibility
Rapid Cost &Working Capital Control
Structural cost review
Accelerate growth opportunity
Enabling the Virtual Workforce
Accelerated Cloud migration
Rapid Supplier RiskAssessment & Mobilisation
Scaling Digital infrastructure& eCommerce
Review& upgradeTech & digital roadmap
Strategic & Capital Portfolio Review
Adjusting customer experience in a COVID-19 world
Workforce &
Cost Control
Supply Chain & Financial Management Marketing &
Customer
Restructuring & Integration Transf
ormat
ion
Agile analytics &decision support
Domains:
1. Crisis response & integrated planning
2. Workforce & talent
3. Liquidity & business continuity
4. Customer interactions & service mgmt.
5. End-to-end supply chain
6. Technology & digital enablement
7. Strategicresponse, scenarios & policy
Sample actions to address the emerging issues
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Double-click on retail trends
Due to changing customer requirements, growing competition& increasing availability of data, OEMs are re-evaluating their business models to drive long-term growth
• High discount leading to 0% RoS
• Online offline integration trend
• Separation of sales and aftersales
Sales, channel, format strategy
• Adopt agency-based direct sales model
• Seamlessly integrate online and offline
• Develop new and innovative formats
Customer journey& process
• No differentiating experience/ service
• Dealer organization not customer-centric
• Unable to obtain customer data
• Engage customers effectively across lifecycle
• Re-organize dealer to enable “one-face”
• Re-design sales process
Network restructure
• Optimization opportunities brought by online
• Changing consumption pattern
• Inefficient network
• Phase out underperforming dealers
• Re-structure network based on intra-city geo-analytics and sociodemographic analysis
Aftersales
• Competition from IAM
• Revenue impact caused by BEV
• New network requirements due to sales innovation
• Centralize B&P services to improve efficiency
• Offer simple aftersales services in city center
• Crate aftersales packages to lock-in customers
Used Car & fleet
• UC market to grow at CAGR of 20%
• UC penetration lower by ~2x vs. mature countries
• Mobility segment to grow ~16% p.a
• Expand trade-in volume
• Re-design dealer KPIs to encourage UC business
• Tailor products and services for 2B customers
Dealer risk management
• Market downturn leads to intense risk level
• Decreasing dealer profitability
• Inadequate protocols to manage dealer risks
• Design risk identification model and classification rules
• Develop response strategy and mechanism
Sample opportunitiesObservation on trends
Future of Automotive Sales and Aftersales | Impact of current industry trends on OEM revenues and profits until 2035 10
Different future scenarios, require the modelling of specific strategic option spaces for all players in the automotive value chain
Future of Automotive Sales and Aftersales | Impact of current industry trends on OEM revenues and profits until 2035
Deloitte Study- Future of Automotive Sales & Aftersales | Impact of
current trends on OEM revenues and profits until 2035
We present a differentiated perspective of future industry effects based on two scenarios of trend emergence.
Beyond that, we distinguish between two degrees of future OEM dominance over the competitive landscape, resulting in four possible future states in 2035.
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Copyright © 2020 Deloitte Development LLC. All rights reserved.
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Marco H. Hecker
Chief Strategy Officer Deloitte China
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