MONDIAL DE L’AUTOMOBILE 2012 Bilan & défis de l’industrie … Wyman Automotive... · 2016. 4....
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© Oliver Wyman MONDIAL DE L’AUTOMOBILE 2012 Bilan & défis de l’industrie automobile à l’horizon 2020 17 Septembre 2012 CONFERENCE DE PRESSE Remi Cornubert Marc Boilard
Transcript of MONDIAL DE L’AUTOMOBILE 2012 Bilan & défis de l’industrie … Wyman Automotive... · 2016. 4....
© Oliver Wyman
MONDIAL DE L’AUTOMOBILE 2012 Bilan & défis de l’industrie automobile à l’horizon 2020 17 Septembre 2012
CONFERENCE DE PRESSE
Remi Cornubert
Marc Boilard
1 © OLIVER WYMAN
Oliver Wyman automotive team in Paris
• Partner
• Automotive practice
leader in France
Rémi Cornubert
28 avenue Victor Hugo
75116 Paris
Phone: +33 1 45 02 33 95
Mobile: +33 6 07 37 84 27
• Associate partner
• Automotive practice
Marc Boilard
28, avenue Victor Hugo
75116 Paris
Phone: +33 1 45 02 32 19
Mobile: +33 6 20 22 44 84
2 © OLIVER WYMAN
Agenda
1 The 2008-09 crisis: where are we now ?
2 What’s next? Major trends until 2020
3 Consequences for the automotive players
4 Questions & Answers
The 2008-09 crisis: where are
we now ?
Section 1
4 © OLIVER WYMAN
Light vehicle s incl. vehicles under 6t
Source: OICA, Ward's: World Motor Vehicle Data, Oliver Wyman analysis
A Glance in the Rearview Mirror The automotive industry has been on a strong growth path for more than 100 years...
Global light vehicle production development
In mn. units, light vehicles, 1900-2011
• Despite several crises the automotive
industry has been growing rapidly
• Declining segments have been
overcompensated by emerging segments and
markets
• Along with the migration to small vehicles has
come a shift in regional focus, with Asia
accounting for more than half of the global
market in 2010 already
• In spite of the long term continuous growth,
the market is quite volatile and can create
significant stress on a short-to-mid term basis
Comments
0
20
40
60
80
100
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Oil crisis
Financial
crisis
World war II
Oil crisis
I & II
?
Growth
Stability
Decline
5 © OLIVER WYMAN
Outcome of 2009 Crisis – OEMs (1/3) The automotive industry has successfully overcome the crisis – some OEMs have managed to even improve operations and profitability…
• The consequences of the financial crisis were already clearly noticeable in 2008, especially in Japan and the US
• Since 2009 the OEMs’ revenues have been increasing and have nearly recovered pre-crisis level
• OEMs from South Korea and China are highly successful in developing markets and were therefore not hit by the crisis
• Overall, a small decrease in profitability can be observed in developed markets (Europe, Japan). Chinese and South Korean OEMs realize significantly higher margins
• In Europe, the mass market is declining while the premium segments progress
• Most of the global automotive OEMs have managed to overcome the crisis within a few years
9.0% 7.7% 7.9%
5.2%
1.5%
9.6%
7.6%
5.1%
10.1%
7.6%
2007 2010 2007 2010 2007 2010 2007 2010 2007 2010
Impact restructuring GM, Ford
Revenue development 2007-2011
Index, inflation-adjusted, 2007 = 100, selected OEMs1
EBIT-margin 2007 vs. 2010
In % selected OEMs1 by region
40
60
80
100
120
140
160
180
200
2007 2008 2009 2010 2011
Rev
en
ue
+17%
+17%
+20%
+6%
+22%
09/2008: Lehman bankruptcy
Already before the crisis regionally differentiated revenue development
Change 2010 vs. 2009 x% Indicative trend
In 2011 the Tsunami’s aftermath heavily
affected Japanese automotive industry
1. Representative OEM sample per region
Source: Factiva, Thomson Financial, company reports, Oliver Wyman analysis
6 © OLIVER WYMAN
Light vehicles production for a sample of groups
Production in vehicles, Base 100 (2009-2011)
80
90
100
110
120
130
140
150
2009 2010 2011 2012F
Outcome of 2009 Crisis – OEMs (2/3) The evolution of OEM’s production over the last years clearly shows contrasted performance
‘09-’12
Cumulated growth rate
Best performers:
+30 - 40%
Average performers:
+20 - 26%
Low performers:
<+15%
Source: J.D Power, Global Car & Truck Forecasting, Global Light Vehicle Production (Q2 2012) ; Oliver Wyman Analysis
7 © OLIVER WYMAN
Outcome of 2009 Crisis – OEMs (3/3) Overcapacity management remains a challenge, especially in Europe
Source: AlixPartners Automotive Global Outlook, WardsAuto
83%
66%
74%
17%
44%
26%
2007 2009 2011
74%
45%
71%
26%
55%
29%
2007 2009 2011
Global vehicle production capacities
• The utilization rate fell significantly in
Europe, reaching 66% in 2009
• Even if the over-capacity fell back to 26%
in 2011, the trend is negative for 2012 with
a declining market and no significant
downsizing of production capacity so far
• In the US, over-capacity reached the high-
water-mark of 55% in 2009 but utilization
was already back to 71% in 2011 thanks to
restructuring and went up to 86% in Q1
2012
• Utilization rates in Europe and in US
went very low during the crisis and
restructuring seems to be the only way
to recover profitability
Comments
Free capacity
Utilized capacity
8 © OLIVER WYMAN
Light vehicles production in Western Europe
Index, 2009 = 100
50
60
70
80
90
100
110
120
2009 2010 2011 2012F
Outcome of 2009 Crisis – Impact in Europe The market has declined in all major European countries, especially in Italy and Spain
Source: J.D Power, Global Car & Truck Forecasting, Global Light Vehicle Production (Q2 2012) ; Oliver Wyman Analysis
• Italy and Spain are suffering a
severe decline
• France saw a slight growth in
2010 thanks to the scrappage
scheme but is now enduring the
after-effects of this policy
• After an impressive fall in 2010,
Germany is on its way to
recovery
• The market remained stable in
the UK
9 © OLIVER WYMAN
Outcome of 2009 Crisis – Impact on suppliers Some suppliers struggled significantly more than OEMs, but the supplier industry as a whole has almost recovered from the crisis
1. Oliver Wyman automotive supplier database. All data with regard to local currency and inflation-adjusted
Source: Oliver Wyman supplier database, company reports, Oliver Wyman analysis
• With the exception of Japanese suppliers, revenues in the traditional markets have mostly recovered from the crisis’ impact
• Especially in Japan, but also in the US and Europe, the profitability of suppliers decreased significantly
• Japanese suppliers also suffered from the diversification of supplier panel initiated by OEMs
• Particularly in China and South Korea, suppliers have realized a considerable increase in revenues and profitability
• Overall, regional development behaves relatively analogue between suppliers and OEMs. The USA represent the only exception, as the suppliers cannot fully participate in the OEM’s upturn
6.5% 7.0% 5.9% 5.8%
7.6%
11.1%
6.0%
2.5%
8.2%
6.6%
2007 2010 2007 2010 2007 2010 2007 2010 2007 2010
EBIT-margin 2007 vs. 2010
In % selected suppliers1 by region
Revenue development 2007-2011
Index, inflation-adjusted, 2007 = 100, selected suppliers1
40
60
80
100
120
140
160
180
200
2007 2008 2009 2010 2011
Rev
en
ue
Change 2010 vs. 2009 x%
-8% +15%
+24%
+11%
+28%
Overall, the consequences of the
crisis were not yet sensible in 2008 view
Indicative trend
In 2011 the Tsunami’s aftermath heavily
affected Japanese automotive industry
09/2008: Lehman bankruptcy
10 © OLIVER WYMAN
104
-
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Mill
ions
Toyota Group Volkswagen Group General Motors Group
Renault-Nissan Group Hyundai Group Ford Group
Fiat-Chrysler Group Honda Group PSA Group
Daimler Group BMW Group Mazda Motors
Other Sales Forecast
Global light vehicles production by group
Production in vehicles, in millions
Growth perspectives OEMs expect a production of 118M vehicles by 2019 (+5,8% p.a.), but market forecast is closer to 104M
Cumulated Annual Growth Rate
Actual (’09/‘12), Forecast (’12/’19)
‘09 – ‘10 ‘10 –’11 ‘11 – ‘12 ‘12 – ’19
24.6% 0.8% 6.5% 8.1%
13.0% (5.8%) 12.5% 4.0%
14.7% 15.9% 4.6% 6.8%
12.8% 10.1% 0.2% 6.9%
8.2% (4.2%) (7.8%) 6.4%
4.9% (13.4%) 20.2% 5.0%
1.6% 7.2% 3.2% 5.9%
9.6% 6.7% 2.7% 5.0%
3.7% 13.0% 6.2% 6.0%
19.8% 9.7% 1.8% 4.5%
12.0% 10.0% 2.4% 4.1%
11.7% 14.7% 2.9% 5.0%
8.6% (6.5%) 19.0% 3.2%
13.3% 4.2% 5.6% 5.8%
64
72 75 80
85
93
99 105
110 114
119
Source: J.D Power, Global Car & Truck Forecasting, Global Light Vehicle Production (Q2 2012) ; Polk Global Auto Forecast, Oliver Wyman Analysis
Other
Total
What’s next? Major trends until 2020 Section 2
12 © Oliver Wyman 12
Source: Oliver Wyman
• Environmental
regulation
• Growing
consciousness
of sustainability
• Shift of growth to
emerging
countries
• Emergence of
megacities
• Aging, more active
population
• Increasing
demand for
mobility
• Shift towards
premium and low
cost segments
• Increasing
demand for
safety
• Individualization
of demand
• Increasingly
“using instead of
owning”
• A more and more
connected world
• Electrification of
powertrains
• Lightweight
challenge
Main trends The automotive industry will be deeply impacted by a few major trends until 2020
Environment Society / Demography
Customer
Demand Technology A B C D
13 © Oliver Wyman 13
Source: Le BIPE a 50 ans * Compared to 1990
Context and objectives for the reduction of CO2 emission
2007 2008 2009 2012 2015 2020 2025
70 g CO2/km
95 g CO2/km
120 g CO2/km
140 g CO2/km
120 g CO2/km
95 g CO2/km
95 to 70 g CO2/km
140 g CO2/km (voluntary engagement)
End of Kyoto protocol : -5% global CO2
European objective: -20 to -30% CO2 Emission*
Financial penalty Attribution of CO2/km objectives per constructor, to be reached in stages
European Green Book (towards a new culture of urban mobility)
CO
2 e
mis
sio
n L
ev
el
Calendar for the reduction of new vehicles average CO2 emission
Environmental regulation Objectives of CO2 emission reduction have been set at European and international level for new vehicles, impacting the car industry and the mobility habits of populations
Impact for
automotive
• Shift to new drive technologies, including electric vehicles and new products, e.g. mobility services
• Continued search for lightweight materials to minimize fuel consumption
• Increasing share of R&D costs for OEMs
A B C D
14 © Oliver Wyman 14
Growing consciousness of sustainability With the shift of customer requirements, the innovation focus will change from comfort and variety to strong environmental and cost efficiency improvements
Change in innovation focus1
Share of vehicle innovations by customer value, in %, multiple nomination
possible, n = 2,551
1. Approach: All innovations are evaluated based on customer value (innovation focus). Each innovation could address various customer value
Source: Center of Automotive Management, Oliver Wyman analysis
• The innovation focus “environmental
friendliness” and “cost efficiency”
have increased significantly in the
last years
• The focus of technical innovation
was on vehicle concept and body in
2006 (31% 2006 vs. 14% 2010), the
focus today is dominated by
innovations in vehicle drive train
• The innovation focus of safety and
performance has remained almost
the same level in the past few years
Comments
18% 18%
42%
18% 14%
24%
54% 50%
31%
19% 16%
8%
0%
25%
50%
75%
100%
Environmentalfriendliness
Cost efficiency Comfort Safety Performance Variety
2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010
A B C D
Impact for
automotive
• Refocus of R&D on environmental performance and cost efficiency
• Safety remains a must
15 © Oliver Wyman 15
Shift of growth to emerging countries A strong shift towards “emerging” markets will make Asia the dominating automotive region
Source: LMCA Q1/2012, Oliver Wyman Research and analysis
1Included here: South America, China, India, Eastern Europe and Russia
World light vehicle production
In mn. units
15,5
3,9
2012 2025
14.0 17.8
2012 2025
4,5 6,9
2012 2025
Western Europe
India
S. Korea & Japan Rest of Asia
North America
+1.9%
+3.3%
Eastern Europe and Russia
+4.0%
+.5.5%
China
+5.5%
+0.9%
+5.1%
+11.2%
3,82,0
2012 2025
14,0 15,7
2012 2025
37,5
18,7
2012 2025
11,26,7
2012 2025
12,818,8
2012 2025
3,67,2
2012 2025
0,7 0,9
2012 2025
South America
RoW
Established markets Emerging markets Other
X.X% CAGR (Compound Annual Growth Rate)
+3.0%
Africa
+2.0%
Impact for
Automotive
• Global coverage required for OEMs to capture market growth
• Increasing competition in emerging countries, also with new local players
Global growth 2012 –
2025 CAGR: + 4%
Weight of BRICS1 vs total
market:
• 2012: 42%
• 2025: 53%
A B C D
16 © OLIVER WYMAN
• In the future, a major share of the
world population, especially in
emerging markets, will be living in
megacities
• Megacities globally gain importance in
absolute number and size, esp. in
emerging markets
• The share of the world population
living in urban areas is constantly
growing (47% in 2000, 53% in 2015)
• Management of resources becomes
key to prevent environmental collapse
• The dominance of megacities
requires innovative solutions for
responsible resource management
Source: Department of Geography, Cologne University, UN, Oliver Wyman study
Example
-10
>10 to 20
>20 to 30
>30 to 40
>40 to 50
>50 to 60
>60 to 70
>70 to 80
>80 to 90
>90 to 100
Level of urbanization
Population in cities (%)
1950
1975
2001
2015
30 25 20 15 10
Megacities
Population in year
City population (mn)
Lagos
Kairo
Istanbul
Karachi
Mumbai
Kalkutta
Dhaka Delhi
Jakarta
Manila
Beijing Tientsin
Shanghai Osaka
Tokyo
Los
Angeles
Mexico
New York
Buenos Aires
Sao Paulo
Rio de Janeiro
Impact for
Automotive
• Demand for vehicles suited for city traffic, vehicle becomes a mobile lifestyle hub
• Introduction of emission based access permissions and / or street tolls
• Usage of public transportation systems as alternative, especially for weaker incomes
• Development of electric bikes and scooters
Emergence of Megacities In the future, a major share of the world population, especially in emerging markets, will be living in megacities
Remarks Emergence of Megacities
A B C D
17 © OLIVER WYMAN
• According to the UN the aging of population is
unprecedented, pervasive, and enduring
• Aging population in mature markets mainly benefits
from social security coverage; however, decreasing
ratio of working to retiring people increasingly is a
financial burden
• Financial coverage of older population in emerging
markets with higher uncertainty due to limited
welfare
• Aging societies faced by lack of young, qualified
workforce
11%
21%
17%
9% 9%
14%
5%
22%
34%
27%
24% 24% 25%
10%
2005 2050
Europe Northern America
Latin America
Asia Oceania Africa World
1 Third Age = Time after retirement Source: UN, Shell PKW Studie 2004, OECD, Oliver Wyman study
The population gets older and – when affordable – will follow a more active lifestyle than in the past
Aging, more active population The worldwide share of population >60 years old will significantly increase, leading to a large market segment with new, age-related requirements
Impact for
Automotive
• In emerging markets growth of generation most likely to buy cars • Special requirements of “older” people in mature markets
– In 2002, 25% of the new cars in Germany were sold to people > 60 years, whilst in 1992 these were only 14%
– Need for new car designs to facilitate access and use – Mobility in the “third age1” is an important factor for social integration and an active lifestyle
Percentage of population > 60 years old of total population
Remarks
A B C D
18 © OLIVER WYMAN
• Growth in passenger travel driven by increasing job
required mobility as well as increasing activities in
spare time
• Road vehicle traffic accounting for around 80% and
growing stronger than public transportation
• Specification automotive industry
– High pressure on automotive mobility budgets,
e.g. volatile oil prices, increasing taxes, tolls, etc.
– However, vehicle stays the major means of
transportation despite growing pressure on
household mobility spending
Passenger mobility will continue to rise, while
the vehicle stays the major means of
transportation
731 818 831 873
75 76 76
86 77
72 74 98
43 46 55
73 926
1012 1036 1130
0
200
400
600
800
1 000
1 200
2000 2004 2008 2015
Passenger travel Germany until 2015 In mn. Passenger km
CAGR 00-15
1,3%
3,6%
1,6%
0,9%
1,2%
Air travel Rail travel Road public transport Road vehicle traffic
Source: VDA 2005, Oliver Wyman study
Increasing demand for mobility Remarks
Example
Increasing demand for mobility Job-related traveling as well as increasing traveling in the spare time lead to higher demand for mobility
A B C D
Impact for
Automotive • The car market will continue to grow in all geographies • Due to the pressure on automotive mobility budgets, low-cost and second-hand markets will grow
19 © Oliver Wyman 19
Source: Oliver Wyman, Polk Marketing Systems
21% 24%
71% 67%
8% 9%
2006 2015
Premium
Middle
Entry
• Increasing polarization of income distribution
• Losses in the medium-volume segment
• Growth in premium, upper-middle class and fun
segments
• Growth of the low-cost segment and demand for
specific low-cost models
“Loss of the middle” in mature markets
Income
Households
Income
Households
Automobile production by vehicle segments Worldwide, in %, 2006-2015
Polarization of Income Distribution Polarization of income distribution shifts demand structures toward Entry and Premium
Impact for
Automotive
• Collapse in the middle for vehicle segments, simultaneously increase of premium, higher middle class
and low cost segments (e.g. Dacia Logan); in some emerging markets growth of middle class
• Polarized demand regarding automotive distribution channels, e.g. full service leasing vs. fast fit
• Positive or negative impact on OEMs margin, depending on market positioning
A B C D
CAGR ‘06-’15
1,3%
-0,6%
1,5%
20 © Oliver Wyman 20
96 174
259
367
510 532
685
814
1010
1200
1300
4% 7%
11%
15%
21% 23%
26%
30%
36%
40% 40%
0
200
400
600
800
1000
1200
1400
2004 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e
Thousands
Entry Level % of Group Sales
Logan
Sandero
Duster
Shift towards of premium and low cost segments Dacia has been extremely successful since 2004 ; Entry level is expected to represent up 40% of total Renault Group Sales by 2013
Dokker
Lodgy
Renault Group: Entry level sales and % of total sales
2004-2014
An
nu
al
sale
s (
k u
nits)
Source: Société Générale Cross Asset Reasearch
Note: Figures encompass all entry level vehicles, whether branded as Dacia or Renault
A B C D
21 © OLIVER WYMAN
Source: planetsave, tagesschau, Superfos, aiche, www.medizin.de, VDA, OECD, Oliver Wyman study
• As basic consumer needs are satisfied, safety aspects
are gaining importance
• Higher performance and complexity supplied and
required (globally increasing hazards e.g. terrorism,
diseases, etc.)
• Increase in consumer information, education
• Specification automotive industry
– Decrease of road fatalities as major objective
(increasingly successful)
– Focus on passive safety complemented by the
increasing development of features for active safety
– Introduction of obligatory rating tests regarding
safety features
– Intensification of customers‘ upfront research on
product offerings – growing importance of brand
values and trusted third party sources
Increasing demand for
safety
Food Safety
Seismic Disaster Prevention
Medical Safety
Traffic Safety
Chemical Process Safety
Nuclear Safety
Increasing demand for safety Remarks
Increasing Demand for safety Consumers’ & governments’ rising demand for safety is strongly present and continues being a major driver for automotive innovation, now shifting from passive to active safety
A B C D
Impact for
Automotive
• Safety remains a major innovation area , especially active security equipment
• Need of a comprehensive and affordable safety package from entry level
22 © OLIVER WYMAN
Example
Number of models, 1990, 1999 and 2012
Source: Company information, Oliver Wyman Research
7
9
23
7
11
20
8
14
23
1990 1999 2012
Vehicle models
# of models
G Off-Road G Off-Road Viano
SL Roadster ML SUV SLS Roadster
S-Class Coupé V-Class MPV SLS Coupé
S-Class Lim. SL Roadster SLK-Klasse
E-Class Coupé SLK Roadster SL-Klasse
E-Class Kombi CLK Cabrio S-Klasse
E-Class Lim. CLK Coupé R-Klasse
190 Lim. CL Coupé M-Klasse
S-Class Lim. GLK-Klasse
E-Class Kombi GL-Klasse
E-Class Lim. G-Klasse Cabrio
C-Class Kombi G-Klasse
C-Class Lim. E-Klasse Coupé
A-Class Lim. E-Klasse Cabrio
E-Klasse T-Modell
E-Klasse Lim.
CLS-Klasse
CL-Klasse Coupé
C-Klasse Coupé
C-Klasse T-Modell
C-Klasse Lim.
B-Klasse Lim.
A-Klasse Lim.
8 14 23
1990 1999 2012
Individualization of demand …leading to an increasing complexity: the number of models offered by German premium OEMs has tripled in the last twenty years
A B C D
X 3
Impact for
Automotive
• Higher diversity and complexity for OEMs
• Increase of R&D modules to prevent development costs explosion
23 © OLIVER WYMAN
Overview car usage patterns
2011; in % of respondents; all sample countries
Source: Oliver Wyman / ESB research
Car usage patterns by geography
2011; in % of respondents; all sample countries
No car or drivers license
No car but hold a driver license
No car, use car sharing scheme
Own/lease private car
Use a company car for private use
26%
6% 14%
20% 23%
26%
21% 16%
16%
26%
3%
1% 2%
6%
44%
70% 66% 57%
43%
1% 2% 4% 4% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EnglishMetro
FrenchMetro
GermanMetro
Shanghai Singapore
12%
11%
1%
73%
3%
Thereof share of hybrid /
electric vehicles <2%
Highest share
among
students,
lowest among
workers
Use a company car for private use
Own/lease private car
No car, use car sharing
scheme
No car but hold a driver
license
No car or drivers license
Increasingly “using instead of owning” (1/2) The use of mobility services like car sharing is still limited today but should grow as owning a car is not anymore a symbol for younger generations
A B C D
Impact for
Automotive
• Need to take into account this new type of usage and new approach to mobility
• Opportunities to develop new offers as the market for a “pay per use” model will emerge
24 © OLIVER WYMAN
dec-11(Launch)
febr-12 june-12 sept-12 dec-12 2018F
Others
Premium
Cars
6 000
20 000
32 000
80 000
250
3000
Source: Autolib’, Oliver Wyman 1 Annual subscription
Both network density and subscribers made good progress but challenges remain Number of subscribers (actual and forecast) Number of cars (one year evolution)
1
I experienced some technical
issues at the beginning, but the
system is now running pretty
well
The opportunity to book a car or
parking place directly on the iPhone
app is a real breakthrough
User testimony In spite of some difficulties in the starting days, customer satisfaction is good
Increasingly “using instead of owning” (2/2) New operators emerge: the success of Autolib’ launched in Paris end of 2011, relies on a dense urban network of stations and user-friendly service
Canadian Communauto bought Mobizen from Veolia Transdev and will offer an alternative car sharing solution in Paris
A B C D
25 © OLIVER WYMAN
Source: Oliver Wyman
Illustrative
Increasingly “using instead of owning” – Impact on business models Different industries start taking positions on the market for comprehensive mobility services
Travel and touristic companies
Broker
Lufthansa Sixt /Europcar
Car sharing
Service / replacement
car Sixt flight Bookding
...
Rental car companies
OEMS
Utility companies
Infrastructure companies
A B C D
Impact for
Automotive • Threat of new players entering the market, some of them leaders in their domain
• Opportunities for diversification and partnerships
26 © OLIVER WYMAN
Source: Oliver Wyman
Past Future Today
Connected life Connected systems Connected products
Impact on vehicle usage transformation (selected examples)
Automotive as fastest growing connectivity platform by 2014
Digital explosion by more than 210 mn. connected cars till 2016
Connected car app users fold 40 times from 3.2mn to 129 mn by 2016
…
A more and more connected world (1/2) Driven by the rapid technology development, connectivity within different ecosystems is accelerated, forming a connected world in the near future
A B C D
27 © Oliver Wyman 27
2011 20162011 2016
1 Telematics refers to embedded OEM and aftermarket systems (hardware plus included services) as well as hybrid systems based on smartphone connectivity
Source: ABI Research, BCC Research, iSuppli, Oliver Wyman analysis
Telematics market coverage Worldwide vehicle population, 2011-2016, in mn. units
% share of worldwide car fleet
5%
18%
CAGR 36%
Telematics market revenue Worldwide market, 2011 – 2016, in bn. USD
CAGR 22%
$15 bn.
$40 bn.
45
210
Comments
• Number of Connected Cars fore-casted to grow strongly at ~36% p.a yielding 210 million in 2016
• Shipments of OEM telematics systems grow from ~26 mn. in 2011 to 70 mn units in 2016 (CAGR 22%)
• Aftermarket shipments of telematics
systems rise from 8 to ~16 million units in 2016 (CAGR 15%)
• Overall market revenue will rise by only 22% p.a. to 40 billion USD in 2016 - due to increasing number of affordable non-embedded, hybrid solutions (e.g. Ford SYNC)
x%
A more and more connected world (2/2) The global number of cars with embedded or hybrid connectivity devices will rise to 210 million in 2016 – by then more than 80% of new vehicles sold are connected cars
Significant growth of telematics shipments and a global penetration of +80% in new
vehicle sales
A B C D
28 © Oliver Wyman 28 Source: Oliver Wyman expert interviews, TU Vienna, company information, press clippings
Fuel Savings
€30k +
100%
Ad
dit
ion
al
Co
st
A significant cost gap remains
Electrification Powertrain electrification opens up a new and broad spectrum of alternative drive technologies, but with significant additional costs
ICE (Mercedes C-Class)
10 - 20% savings
+ €500-3000
MHEV (Honda Insight)
10 - 20% savings
+ €1000-4000
HEV (Toyota Prius)
15 - 40% savings
+ €3000-6000
PHEV (Chevrolet Volt)
40 - 65% savings
+ €10 000-16 000
EV (Tesla Roadster)
Up to 100% savings
> €10 000
Fuel Cell (Honda FCX Clarity)
100% savings
> €30 000
A B C D
Impact for
Automotive
• Huge R&D efforts to develop HEV / EV powertrains ; partnership opportunities
• HEV/EV powertrain cost reduction necessary until 2020 to increase target customer base and sales
• Impossibility to develop all the powertrain solutions ; risks to miss the future winning technology
29 © OLIVER WYMAN
180
290
370
500 500
720
940
0
100
200
300
400
500
600
700
800
900
1000
2004 2005 2006 2007 2008 2009 2010
Hybrid vehicles sales worldwide
In ‘000 vehicles, from 2004 to 2010
• More than 4.5 million hybrid electric
vehicles have been sold worldwide by the
end of 2011
• Market leader is Toyota with more than
3.5 million Toyota and Lexus hybrids
(77% of the total cumulated sales)
• The United States is the leading hybrid
market , followed by Japan and Europe
• Cumulative HEV sales up to January
2012:
– USA : 2,18 million units
– Japan: 1,5 million units
– Europe : 0,45 millions units
• 9 443 units have been sold in France in
2010
Comments
Worldwide sales (M units)
% HEV
Sources : Hybrid and electric vehicle development, IFP, November 2011. Alternative Fuel Vehicles (AFVs) and Hybrid Electric Vehicles (HEVs): Trend of sales by HEV models from 1999-
2010“, analyses Oliver Wyman
CAGR :
+31,8% /year
61,7 64,0 66,7 70,4 66,0 64,0 69,0
(0,3%) (0,45%) (0,55%) (0,70%) (0,76%) (1,13%) (1,36%)
Electrification – HEV Sales HEV market has taken off, not only in terms of sales but also in terms of model availability ; however, it remains very limited today
A B C D
30 © OLIVER WYMAN
Electrification – EV Sales Over 58,000 electrics cars and trucks were sold in 2011 – less than 0,08% of the market ; the Nissan Leaf, the Mitsubishi i-MiEV and the Chevrolet Volt are clear leaders
Nissan Leaf 20000 34%
Mitsubishi i-MiEV 17000 29%
Chevy Volt 10000 17%
Tesla Roadster 2000 3%
REVA 2000 3%
Think City 1500 3%
Smith EV 1200 2%
BYD eBus 1000 2%
The Electric vehicles sold in
2011 represent less than
0,08% of Worldwide
vehicles sales
Others
3620
6%
2011 World electric cars and trucks sales
• Launched in Dec 2010
• 35 000 units sold1 by mid-2012
• Launched in July 2009
• 20 000 units
manufactured 3 by mid-
2012
• Launched in Dec 2010
• ~16 000 units sold3 by
mid-2012
• Launched in 2008
• 2 350 units sold2 by mid-2012
1: By August 2012 - "Electric Leaf coming to PR in January". Caribbean Business. 2012-08-28
2: By June 2012 - "Tesla Hits Accelerator Despite Q2 Revenue Miss". Forbes. 2012-07-25
3: By June 2012 - Bernama Media. 2012-06-26
Source: USA Department of Energy, OW analysis
31 © Oliver Wyman 31
Illustration: car weight evolution from 1970 and target until 2020 Segment M1 (average car)
Increase in vehicle dimension – Longer, Wider, Taller cars
Improved Noise, Vibration, Harness & handling
Comfort systems – Air conditionning, Seats
Infotainment & other electrical systems
Occupant safety like airbags, pretensioner…
Performance systems for better acceleration, handling & braking … Emission treatment systems
Delta weight target: 500kg (37%)
Reference C segment car (Golf and equivalent)
Target
Car
we
igh
t
850 Kg
750 Kg
1 350 Kg
1970 2000 2010 2020
Source: Usine Nouvelle, Ecoconception conference 2010
Lightweight challenge Weight reduction is a key topic for OEMs in order to achieve the 2020 CO2 target
Equivalence : 100kg ~ 0.5 l/100km ~ 10 g CO2/100km
A B C D
Impact for
Automotive
• Lightweight design is a priority for all OEMs, and is a revolution for OEMs R&D
• All the vehicule modules are investigated to track potential weight reduction (interiors, body, …)
• High strength steel, aluminium, and composite materials will gain importance
32 © Oliver Wyman 32
• Car structure: -25kg
– Hollow pieces
– Use of High Tensile Steel
• Running Gear: -50kg
– Size reduction of all pieces (e.g. damper) thanks
to overall lower weight
• Interior: -25kg
– Lighter foam and structure for seats: -8kg
– Soundproofing: -14kg
• Spare wheel replaced with reparation kit: -10kg
• Engine: up to -25kg
– New 3-cylinders engine
208
1 180kg
Source: Usine Nouvelle, Automobile magazine Note: Weight savings depend on the model and motorization. Comparison based on: Peugeot 207 1.6 HDi 112 Allure and Peugeot 208 HDi 115 Allure
Lightweight challenge – Example Peugeot reduced the weight of the 208 by more than 15% compared to the 207
Example of weight savings
207
1 418kg
238 kg saved
Weight Peugeot 207 and 208 (Heaviest model)
A B C D
33 © Oliver Wyman 33
Comparison of material lightweight potential
Reference for price and weight is regular steel
Comments
Source: SAE, US Department of Energy
• Glass fiber composites (GFRP) are
the cheapest composite and can
save around 30% weight ; their
relative performance vs cost position
is in the same order of magnitude as
aluminium and high strength steel
• Carbon fiber composites (CFRP) are
most weight effective, but much more
expensive, from 3-4 times the price of
steel (commercial grade), to 10 times
the price of steel for aerospace
applications
Lightweight challenge – Composites Composites can save up to 70% weight when substituted to steel components, but at a higher price
10% 1.0
50% 1.7 65% 2.0
30% 1.3
60% 10.0
50% 3.0 55% 2.5
50% 8.0
30% 1.5
0x
2x
4x
6x
8x
10x
12x
0% 20% 40% 60% 80%
Cost
relative to Steel
High
Strength
Steel
Magnesium
Titanium
Stainless
Steel
GFRP
CFRP
(Aero)
Weight
Reduction
vs. Steel
Aluminum
Regular
Steel
Al matrix
composites
CFRP
(Commercial)
Composites: Carbon Fiber Reinforced Plastics (CFRP), Glass Fiber
Reinforced Plastics (GFRP)
Orders of magnitude
A B C D
34 © OLIVER WYMAN
Semi-structural Structural parts
Characteristics • Parts or modules made by Tier 1 suppliers,
assembled in the vehicle at the end of the assembly
process
• Parts from the body in white, made by OEMS, that go
through paint shop and contribute to crash proof
properties
Example of parts • Bumper beams, Seat frames, hard tops, hatch • Pillars, Floor panel, Cross car beam
Fiber • Mainly Glass fiber today • Main Carbon fiber today
Resin • Mainly thermosets (Polyester & Epoxy) but some
thermoplastic usage
• All thermoset
• Mainly epoxy today
Current applications • Already used in some vehicles (mainly mainstream)
but still limited
• Ex: Land Rover Evoque (hatch)
• Limited to sport cars / “supercars” or electric vehicles
• Ex: Formula1 racecars, Tesla Roadster, Bugatti
Veyron, McLaren MP4-12C, BMW i3 (EV)
Rationale of composites
usage
• Glass fiber composites can reduce vehicle weight
with a relatively moderate cycle time, at
reasonable cost
• However, GFRP parts have been tested since many
years (e.g. hatch Citroën DS, BX) without really
managing to convince OEMs
• In the supercar segment, CFRP’s long cycle time and
high cost are compatible with a high selling price
and small volumes
Earliest time horizon for
series vehicles ≈ 2015 ≈ 2020
Lightweight challenge – Composites for structural parts Composite structural parts will not become mainstream before 2020, while semi-structural parts1 could be widespread around 2015
1. Short Fiber composites are also very common in interiors parts for instance
Source: JEC Composites, Expert Interviews, Oliver Wyman analysis
A B C D
Consequences for the automotive
players
Section 3
36 © OLIVER WYMAN
South Korea
Other BRIC1
China
Europe
Japan
US
Rest of World
155
129
Evolving competitive landscape Although established OEMs have consolidated in the past, new entrants in emerging markets have led to an increasing number of players
• Despite the strong financial and
competitive pressure, OEM brands in
the established markets have been
consolidated only slightly over the
last ten years
• On the other hand, the number of
OEM brands in emerging markets
have increased significantly
• Especially in China, where OEM
brands have almost doubled,
reflecting the growth momentum and
indicating potential for consolidation
in the near future
Comments Global OEM brands
Absolute numbers, in defined regions
# of new/
abandoned
brands
+1 -3
+11 -16
+38 -4
+1 -4
+2
+3 -2
-1
1 Brazil, India, Russia
Note: Brands w/o reported production volume count as not existing
Source: LMCA
32 30
31 26
26
60
16
13
12
14
7
8
5
4
2001 2011
Example of new brands
Example of
abandoned brands
37 © OLIVER WYMAN
Value migration: Example of IT industry market capitalization
0%
20%
40%
60%
80%
100%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Perc
en
t to
tal
eq
uit
y v
alu
e
Service $52BB
Hardware $453BB
Software $547BB
Networking $196BB
Chips $467BB
$132BB $1,907BB
Source: Thomson Datastream; All US public companies in Hardware, Semi Conductor, Software, IT Services, Internet & Selected Telcoms. Equip. ICB subcategories
$125BB $469BB $2,542BB
Internet $191BB
Intel
Microsoft
IBM
Cisco
Diversification of services and value shift The IT industry is an example of tremendous shift of Value…
Value migration car mobility 1950 - 2025
Source: Oliver Wyman
Implications for OEM
• Offering of new services
• Participation in growing and profitable markets
• Integration in existing offer
• Consistency with current brand world
• Establishment of environmental image
• Formation of cooperations with other parties
• One offer leveraging different mobility providers
• Sustained control of customer touch points
• Decreasing market
• Loss of control of customer touch points
• Falling prices
• …
Opportunities
Threats
1950 2025
Services
Operating costs
Vehicle
Vehicle purchase
Vehicle lease /
Finance
Vehicle
Usage fee
E.g. repair, fuel,
insurance
Mobility
services
Diversification of services and value shift … We anticipate a similar shift in the automotive industry toward alternative sources of revenue
39 © Oliver Wyman 39
• Strong growth in emerging countries
• Painful restructuration necessary in Western
Europe to tackle the over-capacity issue
• Fast growing areas : A/B segments, low cost,
premium
• Explosion of the number of connected cars
• Take off of the Hybrid vehicles market and slow
emergence of Electric vehicles
• Lightweight design as a key success factor for
OEMs ; increasing importance of new materials
like composites
• Development of mobility services, shifting the
value downstream, with emergence of new
competitors
Conclusion Agenda for automotive players
Ensure global market coverage
Major trends until 2020 Implications for automotive players
1
2
4
5
Address industrial overcapacity issues
Invest in R&D to develop tomorrow’s key technologies: powertrain electrification, connectivity, lightweight
Investigate the mobility services area
3 Focus the product offering on growing segments
40 40 © Oliver Wyman
CONFÉRENCES OLIVER WYMAN AU MONDIAL 28 SEPTEMBRE 2012 – SALLE 733B – CARINA, HALL 7, NIVEAU 3
14:00 - Informatique embarquée : Une révolution pour les équipementiers
15:00 - Mobilité du futur : Comment faire émerger de nouveaux usages ?
16:00 - Matériaux Composites 2020 : Futur incontournable dans l’auto ?
17:00 - Perspectives auto 2020 : Tendances et défis
17:30 - Voiture connectée : Quand la voiture devient Smartphone
Booth & Conferences at the Paris auto show Attend our conferences & Visit our booth (Hall 3 C332) to meet more of our experts and learn about our recent studies
SAMPLE OF RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE CONTENTS ALONG THE ENTIRE VALUE CHAIN
CUSTOMER R&D
PROCUREMENT /
SUPPLIER PRODUCTION SALES SERVICES
: AFTER SALES
42 © Oliver Wyman 42
Questions ?
Appendix
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (2/7) CUSTOMER
Car Innovation 2015
The study identified five areas for action to improve innovation management:
orienting R&D activities to customer needs and market developments, actively
realigning the innovation portfolio, continuously improving the cost-effectiveness and
risk management of R&D activities, promoting an organization and culture of
openness, so as to adopt trends from other industry sectors, and continually
reassessing the innovation strategy to confirm that it is up-to-date and in tune with
market developments.
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (3/7) R&D
In-Car IT – Trends, Opportunities, and Challenges for Automotive
Suppliers
The emerging role of electronics and software holds enormous opportunities for
suppliers: with in-car IT, they can unlock new revenue sources and break out of their
traditional role in the supply chain. Although the suppliers' management has largely
recognized this, many of them still believe that there is a significant need for action if
they want to keep pace with new technologies. But they can learn from the software
and IT industry in particular when building up the respective capabilities.
Composites Materials 2020
Composites lightweight properties are highly attractive for many industries. This
study takes a general look at the composites market towards 2020 and a closer look
at Automotive, Aerospace and Wind composites demand.
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (4/7) PROCUREMENT / SUPPLIER
Risk Patterns in the Automotive Supplier Industry
The automotive market is undergoing significant changes. Many German suppliers
are well-positioned to exploit these developments as an opportunity, but need
sufficient financial power to do so. Because of uncertainty about the capital markets,
it is important to proactively draw the investors’ attention to possible risks, and to
present a convincing strategy for the next years.
The New Wave of Acquisitions in the Automotive Supplier Industry
Many suppliers are supposed to be put up for sale, but financial investors, in
particular, are hesitant to go shopping for them. As a result, investors operating in a
systematic manner have an opportunity to sweep in and acquire eye-catching
companies at steeply discounted prices. At the same time, pending sales will stoke
competition in many supplier segments.
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (5/7) PRODUCTION
Setting the Stage for Lean Manufacturing Success
Lean’s systems and tools are valuable. But it is how a company executes them −
supports their use − that makes the difference between success and failure. It takes
time and needs the right people systems.
South American Auto Manufacturing
As OEMs expand their footprint into South America’s rural areas, they are inventing
new ways to address their most pressing challenge: building a supplier network that
can deliver the same value the OEMs enjoy in other parts of the world.
The Harbour Report
This yearly confidential report is based on manufacturing data provided by the world
leading OEMs. It highlights discrete objective differences among products, plants
and companies. The report analyzes performance drivers and explain gaps. It
provides insights into other factors beyond labor productivity that impact plant or
company performance – quality, productivity and cost.
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (6/7) SALES
Connected Cars for Customer Retention in After Sales
The fight for customers is entering a new round in the lucrative after-sales business.
If OEMs now go full throttle and systematically exploit the advantages of vehicle
networking, they will quickly leave independent providers in their wake.
E-Mobility: Partnerships in Sales and Marketing
OEMs must come up with a clear marketing concept today to prepare for the arrival
of the e-mobility wave. The top priority of this work is to lock the interface to the
customer into place. Alliances concluded with the widest variety of partners are
essential – from established energy suppliers to start-ups involved in mobility
management and the charging process.
RECENT OLIVER WYMAN STUDIES IN AUTOMOTIVE (7/7) SERVICES
Connected Cars – the Smartphones of the Auto Industry
The ever stronger trend to complete vehicle networking presents a major opportunity
for all OEMs in the lucrative after-sales business to retain vehicle users even after
the warranty period has ended.
The Future of Mobility
Many customers are prepared to significantly change their mobility behavior. If
OEMs want to stay in the game, they must position the car as a key component of
the mobility mix and combine the different modes of transport in a user-friendly way.
Automotive
