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Transcript of Ibm Smarter Mobility Presentation Jens Diehlmann
WelcomeThe webinar will begin momentarily
Peter Brown
Publisher
Automotive News
Jens Diehlmann
Partner – IBM Global Business Services
IBM
Daniel Delos
Partner – Strategy & Transformation
IBM
© 2011 IBM Corporation
Captive Finance: The core enabler of the next automotive growth model
Jens Diehlmann & Daniel Delos
May 24th, 2011
IBM Global Business Services
Let‘s build a smarter planet
© 2011 IBM Corporation
IBM Global Business Services
Who is Jens Diehlmann?
Jens Diehlmann is a Partner at IBM Global Business Services in Germany leading the Captive Automotive Banking Team. In addition, he is a leading Subject Matter Expert and is globally responsible for the IBM‘s Consulting Business across all captive finance companies.
Mr. Diehlmann has over 15 years of experience in Banking &
Financial Services and has worked for over 10 years as a
Strategy Consultant for captive finance companies.
During his career, he advised clients on Business and
Operations Strategy, Leasing & Finance and Bank set-up.
Mr. Diehlmann is a co-author of the book “Automotive
Management – Navigating the next decade of auto industry
transformation“ which was released in June 2010.
© 2011 IBM Corporation
IBM Global Business Services
Who is Dan Delos?
Daniel Delos is an IBM Strategy & Transformation Partner with
IBM Global Business Services leading the Innovation & Growth
services area within the Industrial sector, managing the IBM
relationship with multiple Automotive clients and heading the
Americas Captive Finance competency.
Mr. Delos is responsible for thought leadership, offering
development and staff productivity across the Business
Strategy, Technical Strategy and Market & Customer
Management Strategy domains. This practice area leverages
IBM assets, services and Smarter Planet offerings to help
companies transform in the areas of M&A, Shared Services,
Market Entry Strategies, Sales Transformation, Service
Transformation, Captive Finance, Marketing Analytics and
Smarter Commerce.
© 2011 IBM Corporation
IBM Global Business Services
Agenda
1 Key Market Trends and Issues Challenging Captive Finance Executives
2 Key Findings of IBM‗s 2010 Global Advance Mobility Study
3 Navigating through the Complexity of Advanced Mobility
© 2011 IBM Corporation
IBM Global Business Services
Captive finance organizations are manufacturer-affiliated financial services providers offering original and derivative financial solutions
Tasks:
Acting as OEM‘s sustainable growth
driver and sales support to:
- stabilize corporate results
- promote vehicle sales
- increase customer loyalty
Product/service portfolio is directly
or indirectly related to vehicles:
- leasing and loan for passenger cars
and commercial vehicles
- wholesale finance
Unique role and strength:
Serving as OEM‘s
point of sale integrator
Profile of
captive finance companies
Captive finance companies Non-captive finance companies
Source: Automotive Management – Navigating the next decade of auto industry transformation, December 2010
© 2011 IBM Corporation
IBM Global Business Services
In mature markets, captive finance companies are increasingly advancing towards the automotive banking approach
Diverse approaches for captive finance companies to pursue business
Source: Diehlmann / Häcker: Automotive Management – Navigating the next decade of auto industry transformation, December 2010
© 2011 IBM Corporation
IBM Global Business Services
Status quo for automotive finance
After the economic downturn in 2008 and 2009, the entire car industry has bounced back at full speed.
Booming car sales in China have positively influenced the results of global manufacturers.
The entire industry has had a peak year with 61.7 million car sales in 2010 which is about to continue to 20111).
Leasing and Financing is growing in emerging markets where a growing middle class is gaining more prosperity and thus, demanding more services.
Captive Finance organizations follow their manufacturer in growth marketsto establish own operations.
More and more focus is placed on innovative mobility concepts as stricter CO2 emission regulations force manufacturers to develop new business models and consumers to rethink their mobility demand.
Electric vehicles are gaining ground and most OEMs have models on the market or to be launched soon. However, it will still take some time until this trend will take off.
The entire automotive industry and its financing business has survived the economic crisis well and has established itself again as one of the strongest and profitable industries at all.
1) German Association of the Automotive Industry (VAD), January 2011
© 2011 IBM Corporation
IBM Global Business Services
After the economic downturn, new challenges are awaiting captive finance companies
Residual value
management and
increasing used car
inventory
Stagnating
car sales in
mature markets
Booming
car sales in growth
and emerging markets
Blind spots
in meeting today‘s
consumers ever-
evolving needs
Rising
operating costs
due to decentralized
and outdated IT
infrastructure
Sophisticated
consumers are
increasingly
demanding new
mobility and
ownership models
© 2011 IBM Corporation
IBM Global Business Services
Battlegrounds in the passenger car market is further shifting away from Triad markets
Sales and production of passenger cars by region, 2000 – 20251) (m units)
1) 2025 Figures are estimations
2) BRI countries include Brazil, Russia, India, China
3) Triad markets are North America, Western Europe and Japan
Sales
86
59
44
3
21
32
11 15
5 9 86
2000 2010 2025
80
5344
3
2231
6
11 14 11
1411
2000 2010 2025
Other (2.8)
BRI 2) (12.4)
Triad 3) (0.4)
Source: Roland Berger
Production
Other (2.8)
BRI 2) (12.8)
Triad 3) (0.2)
57 69 114 57 69 114
China (6.8)China (6.7)
(CAGR %)(CAGR %)
© 2011 IBM Corporation
IBM Global Business Services
IBM is the only global consulting company with a team dedicated and spezialized in captive finance
IBM‟s global
automotive banking and mobility engagements
The IBM Automotive Banking team has
discussed and worked globally with CEOs
to identify and develop new mobility
business models
IBM has developed an in-depth
understanding in supporting clients along
the automotive value chain in mature and
growth markets
IBM acts as strategic relationship partner
and incubator for materializing new mobility
concepts in the context of its Smarter
Planet Campaign
Cooperations with diverse stakeholders of the globally extended automotive ecosystem allows
IBM‗s Automotive Banking Team to make valuable contributions to advance sustainable road
mobility.
© 2011 IBM Corporation
IBM Global Business Services
The IBM Automotive Banking services portfolio is well-equipped to support captive finance executives in paving the future avenue to growth
Automotive
Banking
Captive Finance Strategy
New business opportunities
Business model innovation
Business transformation outsourcing
Target operating model
New Intelligence
Residual value & used car management
Captive finance performance analysis
Data management & business analytics
Operating Model &
Process Optimization
Process optimization & harmonization
Shared service centers
Information Technology
Target IT architecture
Document management
Auto finance software vendor selection
Application management
Market Entry
Strategy development & implementation
Feasibility study
Reference process maps for business
operations and system evaluation
New Mobility Services
New mobility concepts
Smarter transportation
Financing options for alternative
vehicles
Automotive Banking
© 2011 IBM Corporation
IBM Global Business Services
This is changing the entire way products are sourced, manufactured and distributed—and making business more complex than ever.
Customerexpectations of service, price and delivery is soaring.
Customers now have unlimited access to information and can instantly share it with the world
Social networking and mobile commerce have dramatically changed the dynamic between buyer and seller.
We have entered the age of the empowered customer
155 millionNumber of tweets sent via Twitter each day
75%Percentage of people who believe companies don’t tell the truth in advertisements
$93 billionAmount in sales missed due to out of stock inventory
© 2011 IBM Corporation
IBM Global Business Services
Power has shifted to the customer — compressing margins and changing paradigms
Understand and
anticipate
customer
behavior and
needs based on
customer
insights across
all channels
Adapt sourcing and
procurement based
on customer
demand and
optimize supplier
interactions across
extended value
chains
Market, sell and
fulfill the right
product and service
at the right price,
time and place
Service
customers
flawlessly,
predict and
drive customer
loyalty
In this new era, businesses need to:
© 2011 IBM Corporation
IBM Global Business Services
Smarter Commerce focuses on three dimensions centered around the customer
Customer
You need an approach that
allows you to more effectively
connect, collaborate, conduct
commerce and create a
differentiated customer
experience
In today‘s world of instant
business, you need deep
insights, in real-time that you
can turn into immediate action
Customer InsightIn turn, you must re-think how
your customers define
value, and the changes you
must make to your value
chain so you can deliver
exactly what your customers
want - profitably
Customer Value Strategy
Customer & Partner Engagement
…increasing the value companies generate
for their customers and partners in a
rapidly changing digital world
© 2011 IBM Corporation
IBM Global Business Services
IBM Confidential
Businesses are rapidly adopting Social Media to ―be in touch‖ with their customers, but customers often engage for different reasons
Source: From Social Media to Social CRM, IBM Institute for Business Value Analysis, 2011. n=339
Key reasons cited for engaging in social
media relationship with a business
Percentage of Companies with a Profile or
Presence on a Type of Social Site
Company
Customer
Avoid being perceived as ―out
of touch‖
Attract top employees
Missed sales opportunity
Competition being more
successful in reaching
customers
Promotions, coupons, savings
or some other form of benefit
Positive brand association
Lifestyle choice and simplicity
Vs.
© 2011 IBM Corporation
IBM Global Business Services
Capabilities Framework Evaluation
Realization Roadmap
Establish The Vision
Channel Assessment
IBM has developed a Smarter Commerce Multi-Channel Business Value Assessment to help clients answer the following question…
―Are your Marketing and Sales organizations effectively and efficiently delivering the right products, services and experiences to the right customers across preferred channels?‖
Sales & Channel Process OptimizationEvaluation of the current state of sales execution effectiveness and efficiency through cost-to-serve model.
Customer / Account SegmentationIdentification of key areas of marketing and sales opportunities through the assessment of customer behaviors, products and channel preferences.
Customer Experience AssessmentEvaluation of the cross-channel user experiences using proven cross-industry practices and innovations. Evaluation of your digital presence including web, mobile and social leveraging our assessment tool that features an extensive
database of online capabilities and leading practices.
Marketing Process OptimizationAnalysis of current marketing operational capabilities, including analytics, campaign effectiveness management and channel capabilities.
© 2011 IBM Corporation
IBM Global Business Services
Besides our operating business, IBM is aggressively investing in further developing intellectual property and shaping the development of future-oriented mobility services
Intellectual propertyNew mobility concepts Strategy and education
“Advancing
Mobility
Study 2010”
„Global CEO Strategy Workshops
for new mobility solutions““Electric taxis in
China‟s mega-cities”
“Project Edison”
European research project for the
set-up of intelligent e-vehicle
infrastructure
“Automotive Management”
Navigating the
next decade of
automotive
Industry
transformation
“Truck 2020
Study 2009”
IBM
IBM
„CEO Study 2010“
E-Mobility and the impact on
Captive Finance Companies
Thesis
© 2011 IBM Corporation
IBM Global Business Services
Agenda
1 Key Market Trends and Issues Challenging Captive Finance Executives
2 Key Findings of IBM„s 2010 Global Advance Mobility Study
3 Navigating through the Complexity of Advanced Mobility
© 2011 IBM Corporation
IBM Global Business Services
123 executive interviews
18 countries
Others (outside of OEM) include: academia,
government, service integrators, venture capitalists,
mobility consultants and fleet operators
Interviews by Industry Segment
27%OEMs
17%Captive
Finance
10%Suppliers
5%EV Mfg
3%Car Share
7%Energy
12%Others
7%Government
3%Ind. Groups
10%Telematics
Traditional Auto InfluencersNew Mobility
Together with IBM Institute for Business Value (IBV), the Automotive Banking Team launched a global study on future-oriented mobility by looking outside the traditional automotive value chain
© 2011 IBM Corporation
IBM Global Business Services
The most important findings can be summarized as follows:
Rethinking mobilityTransforming how people move about is among the most complex
struggles for cities, businesses and citizens. The economic, social and
environmental concerns of mobility are forcing new ideas on providers.
Auto companies make
vehicles
Although automotive companies will need to develop mobility solutions,
they cannot lose sight of the need to develop technology-packed,
intelligent vehicles at competitive prices.
Thinking outside the
vehicle
New packages need to be developed for all major customer segments
that establish automakers‘ stake in providing mobility solutions.
Automakers have assets that can be leveraged to protect their interests.
Partners, competitors
and alliances
Who are partners and who are competitors? More often these will be
the same. The partners needed to assemble innovative solutions will
also be positioning themselves to control customers and their wallet.
Finance becomes the
new core
Mobility solutions require that finance companies become the core
enabler to simplifying the way that consumers want to move. The
integrating feature across partnerships will be homogenous transactions.
© 2011 IBM Corporation
IBM Global Business Services
Automakers will have to reinvent their business models to cater to a new market segment of consumers who are not tied to individual vehicles
Not an attractive
business model
More than 50%
About 25%
How many consumers would be willing to give
up their personal vehicles? provided sufficient subscription mobility services exist
14%
50%
0%
Very few 36%
Source: Advance Mobility Global Interviews (n=42), IBV Analysis,
“The most important step is to enable consumers to move from ownership of vehicles to selling a subscription to them as needed”
–European Auto OEM
It is expected that future customers will
demanding more flexible mobility solutions
Subscription mobility could provide that
flexibility:
–Consumer may give up vehicles altogether
–They could choose to have less vehicles as
they pursue an ownership model based on
their everyday needs
© 2011 IBM Corporation
IBM Global Business Services
People across age groups are finding it difficult to own a car and choosing to drive less for a number of reasons, with ‗Millennials‘ topping the list
55 years or older
18-34 years old
35-44 years old
45-54 years old
Somewhat AgreeStrongly Agree
In the past year, I have
consciously reduced
how much I drive, and
instead took alternative
transportation
With access to social
networking sites, I
choose to spend time
online with friends
instead of driving to
meet them
I want to protect the
environment, so I drive
less.
45%
40%
24%
31%
54%
46%
18%
34%
45%
39%
42%
37%
Source: Zipcar Millenials Survey (n=1025), 2010
Alternative Transportation defined as carpooling, public transportation or bicycle
In today‘s economy, it
can be difficult to own
a car because of the
high cost of gas,
parking and
maintenance
80%
71%
68%
76%
35% 16% 23% 16%
© 2011 IBM Corporation
IBM Global Business Services
For automakers to exploit new business opportunities, they have to think outside the vehicle in order to cater consumers who are moving away from owning a car to using mobility solutions
Vehicles Cashless PackagingMulti-modal Transportation
Service Integration
Daily vehicles
Subscription vehicles
Insurance
Tolls
Parking
Electricity
Security
Connectivity
Other in-vehicle
purchases
Solutions beyond the vehicle such as
location-based services or event services
Optimization and guidance across modes
Integrated cashless process
“Auto companies often view mobility through the lens of just the vehicle, not the consumer"
–US Automotive OEM
© 2011 IBM Corporation
IBM Global Business Services
The alliances to enable mobility solutions must start between the OEMs and their finance companies
“Financial services do not drive change but have to be ready when
Brand Partners require them”– European Captive Finance
“We’ve spoken to several finance companies, but have neglected to
consider our own ”– US Automotive OEM
OEM View Captive Finance View
…Automotive finance companies should be
natural partners for enabling mobility solutions
“There is no clear decision-making structure in the company that brings us together”
– European Captive Finance Executive
Many OEMs are seeking partners to pilot
new ideas, but have not approached their
own finance companies
Captive finance companies are waiting
to take direction from the OEM and
don‘t feel in a position to lead
© 2011 IBM Corporation
IBM Global Business Services
The changing environment will require enhancements in the existing customer interaction to leverage the benefits
How will the future mobility consumer
change the ownership model?
What kind of financing models are
required to meet the challenge of bundling
mobility solutions into attractive consumer
services and enabling its deployment across
partners?
How and to which degree will today‘s vehicle
market structure change in face of
increasing acceptance of new mobility
solutions?
How can access and simplicity be
provided to consumers of new mobility
solutions despite increasing complexity in
enabling mobility?
To what extent will the
new economic environment be different?
To a large/very large extent
To some extent
In our recent CEO study we asked…
Source:2010 Global CEO Study/ Automotive, 2010., Advance Mobility Global Interviews (n=55), IBV Analysis
61% 16%Structurally
different
Sustained change
"In the next 10 years we will have
more change than in the 50 years before"
–European Automotive OEM, 2008
IBM Automotive 2020 Study
© 2011 IBM Corporation
IBM Global Business Services
Instrumented
Monitoring and maintaining the
integrity of the automotive supply
chain while creating vehicles that
can measure their own health
and sense their surroundings.
Interconnected
Applying sophisticated
devices to connect consumers
and vehicles to a broader
transportation system that
encompasses roadways, energy
sources, governments and more.
Intelligent
Transforming raw data
into critical insight for quickly
and accurately responding to
changes and achieve better
results through prediction
and optimization
a
IBM Advanced Mobility Services
Car sharing eMobilityCar on demand Fleet Management Intermodal travel
Advancing mobility demands new ways of operating and calls for IBM‘s Smarter Planet Solutions
is an integral part of IBM‟s Smarter Planet Strategy
© 2011 IBM Corporation
IBM Global Business Services
Watson represents out latest groundbreaking innovation in IBM‘s Business Analytics and Optimization solutions
Watson is a computing system
that rivals a human‘s ability to answer
questions posed in natural language,
interpreting meaning and context and
retrieving, analyzing and understanding
vast amounts of information in real-time
Watson represents a culmination of
IBM‘s century-long dedication to research and innovation.
This same investment in research is driving the creation of new
Business Analytics and Optimization capabilities, allowing the
innovations from Watson to be applied to solve business and societal
problems – for example, diagnosing disease, handling online technical support
questions, and parsing vast tracts of legal documents - and to drive progress
across many industries.
© 2011 IBM Corporation
IBM Global Business Services
Agenda
1 Key Market Trends and Issues Challenging Captive Finance Executives
2 Key Findings of IBM‗s 2010 Global Advance Mobility Study
3 Navigating through the Complexity of Advanced Mobility
© 2011 IBM Corporation
IBM Global Business Services
Fleet Operator Utilities GovernmentOEMs &
Suppliers Insurance Service Provider
As an enabler, IBM is capable of turning the vision of smarter mobility concepts into reality by means of business analytics and optimization
Mobility-as-a ServiceCar on
DemandCar SharingIntermodal
travel
Stakeholder
Pay as you Use
ConciergeServices
IBM Advanced Mobility Service Hub
Core Services In
frastr
uctu
reS
yste
m In
tegra
tion
Backend Systems
User Devices
Road Side Devices
„Always On― Vehicle Connectivity
Value Added Services
Connected Vehicle Marketplace
EV ChargingStations
P
Vehicle Data Collection
3rd Party Data Integration
Data AnalyticsMaster Data Management
B2B Service Management
Device Management
Security & Privacy Mgmt
Remote Diagnostics
EV Services
Fleet MgmtServices
Car Sharing Services
VehicleTracking
ModalityServices
Location based services
Usage based Insurance
© 2011 IBM Corporation
IBM Global Business Services
OEM„s
app
A 360° view of consumers has increasingly become a precondition in successfully targeting today‘s interconnected consumers
Customer data
management becomes
essential in achieving:
360° customer view
Consumers are globally connected
© 2011 IBM Corporation
IBM Global Business Services
Today‘s sophisticated consumers demand new mobility solutions which replace or extend the use of their personal vehicle
Parking
Subscription fleetLocation-based
Services
Multi-modal Transport
Event Service
Travel Service
MobilitätMobility
© 2011 IBM Corporation
IBM Global Business Services
Decision Optimization &
Automation
Recommend the
most appropriate
action to take
People & Business &
Enterprise Data Sources Store new data on
customers, sales, etc.
for continuous
improvement
Business
Analytics and
Optimization
Analyze all forms
of data to provide
insight and
predict the future
Capture
Predict
Act
Sales Data
Customers Surveys
Transactions
Suppliers Web Logs360
°
Attract ―best‖ customers
Target customers:
cross-sell, up-sell, retention
New product releases,
product adoption
Grow customer value
Retain profitable customers
Leverage
the power of
information by
applying business
analytics and
optimization to customer
data management
Blind spots need to be removed for delivering new value and improved lifestyle experience meeting consumers‘ ever-evolving mobility needs and wants
© 2011 IBM Corporation
IBM Global Business Services
We have only just begun to uncover what is possible on a smarter planet
The main question remains
to be answered:
Who will be the first to
drive and thriveon the new avenue for growth
in a smarter mobility industry
© 2011 IBM Corporation
Thank you for your attention
Q&A
Thank You
This webinar will be available on-demand in a few days at www.autonews.com/webinars
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