2018 new year’s briefing - markit · 2019 fox* 2015 praktik 2015 altea 2022 alhambra 2016 vw...

Confidential. © 2017 IHS MarkitTM. All Rights Reserved.

© 2017 IHS Markit. All Rights Reserved.

6-7 February 2018 | Frankfurt, Germany

Mario Franjičević, Senior Analyst

+49(0)6920973332, [email protected]

2018

New Year’s Briefing


European Light Vehicle Production

Presentation Name / Month 2017

2

Mario Franjičević, Senior Analyst, +49(0)6920973332, [email protected]

• Premium Brands’ Transition to Electrification

mailto:[email protected]


Global Light Vehicle Production Outlook2017 to 2018 forecast outlook by Region

Frankfurt, February 2018European Light Vehicle Production Outlook

3

2017

2018

Japan/Korea Greater China

MEA

North America

South Asia

Europe

South America

Global LV production walk: 2017 to 2018

© 2017 IHS MarkitSource: IHS Markit

Global + 2%

-1.6% +0.7%

+4.2%

+10.4%

+1.9%

+13.6%

+1.7%95.1 M

96.9 M

-0.22 M + 0.20 M

+0.25 M

+ 0.29 M

+ 0.36 M

+ 0.42 M

+ 0.45 M


Global Light Vehicle Production OutlookAdvanced vs. Emerging Markets


4

LV Production by Region


0

20

40

60

80

100

120

2005 2010 2015 2020 2025

Mill

ions

China

South Asia

South America

MEA

South Korea

Japan

Europe

North America

LV Production by brand origin


0

20

40

60

80

100

120

2005 2010 2015 2020 2025

Mill

ions Chinese brands

Indian brands

others

South Korea brands

Japan brands

Europe brands

US brands

Late

stby

2025 C

hin

ese b

rands

will

pro

duce

more

than

US

bra

nds


European Light Vehicle Production OutlookShort Term Growth and Long Term Risk


5

Europe (LV Production in Millions)


21

22

23

24

25

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

2018-01

Short Term 2017-2020:

Better than expected market demand in Western Europe

Russian market recovery with more dynamic momentum

The BREXIT slump has yet to take full effect in 2018, with other

Western European markets cooling down in growth a bit

Long Term 2021 – 2025:

Increased visibility on OEM‘s zero emssion vehicle strategies,

showing a more agressive BEV launching phase in the 2019-

2021 time frame.

Although export ratio is considerably lower (20%) than in Japan

(ca. 50%). The Export ratio of premium brands is at 40%, the

risk being further localization

But without exports to overseas markets Europe would be as

slumping as Japan and Korea

Short Term LongTerm


European* Exports will continue to define growth in the mid-term2017 to 2025 production growth by export desitnation


6

2025

West Europe

Central Europe

Turkey

Russia*

China

Asia+MEA

Americas

2017

European Shipments

Overseas Shipments

20.6 M

21.6 M

*European production without Russian output

-0.71. M

+0.19 M

+0.20 M

+0.43 M

+0.15 M

+0.32 M

+0.42 M


European Light Vehicle Production OutlookGrowth Trend for countries and Segments


7

1

2

3

4

5

6

7

2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Mill

ions

LV Production in Europe


European production volume of B-CUV vehicles until 2025


0,10,2 0,2 0,2

0,10,2

0,3 0,4

0,5

0,7

1,11,2

1,4

1,7

1,9

2,32,3

2,4 2,5 2,5 2,6

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2005 2010 2015 2020 2025

Millio

ns European sourcing of

global B-CUV production30%

Nissan Juke

Renault Captur

Suzuki SX4

Jeep Renegade

Toyota C-HR


14

15

16

17

18

19

20

21

22

23

24

25

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

x 1

.00

0.0

00

Europe + Russia

Europe w/o Russia

European Light Vehicle Production OutlookEuropean* Light Vehicle Production is facing a critical transition


8

2019-2022: critical transitional phase for BEV production in Europe, triggered by VW Group’s first electrification wave and its MEB platform.

2030: BEVs with a more dynamic outlook 2016-2029 CAGR : 24.5% vs overall market 0.5%. (Production w/o BEVs = -0.3%)

transitional

BEV production phase

European Light Vehicle Production Forecast


2 Mio

BEV units

3 Mio

Russian build


Legislation & Regulation are a driving force for EVsEurope: New targets are designed to spur investment in electrification


9

60

80

100

120

140

2013 2017 2021 2025 2029

EU Proposal

Current Rule

CO2

restriction

High

Low

EU Commission proposal:

No absolute values (in g

CO2/km), but relative

reduction compared to

2021

g CO2 /km

The EU has a current target of 130 g Co2/km.

By 2021, the target is significantly reduced

to 95 g Co2/km

In November 2017, the EU Commission has made a

proposal to reduce CO2 emissions for cars:

-15% by 2025

-30% by 2030

Outside of Europe:

USA: ZEV Mandate in California and Northeastern US

(Section 177 States)

China: Government set NEV quota

+ local government set city entry restrictions

95g

-15%

-30%

transitional

BEV production phase


9,5

10,0

10,5

11,0

11,5

12,0

12,5

13,0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Volkswagen AG (actual)

Volkswagen AG (IHS Markit 2018-01 Forecast)

Global Volkswagen AG LV Production Forecast (in Million)


Volkswagen AG ForecastManaging the transition to an electrified global OEM


10

„Dieselgate“ impact:

US production interruption

MQB Platform– end of 1st cycle

1st Electrification Wave:

MEB Platform – ramp-up

2nd Electrification Wave:

PPE Platform – ramp-up

Source. Volkswagen AG presentation: 5-Year Planning Round: Groundwork to Deliver Strategy 2025

0% 25% 50% 75% 100%

Volkswagen

Renault/Nissan

Toyota China

Europe

N.America

Japan/Korea

others

Top 3 OEMs Global Sales Target Markets in 2020

It is not a coincidence that VW Group’s EV Strategy is in line with

tightening regulations in VW’s core markets

VW is most dependent on highly regulative markets like China and

Europe

Renault/Nissan and Toyota have a much more globally diversified

sales footprint, and therefore not under immediate compulsion to

meet regulations


Volkswagen AG’s model portfolio (r)evolutionSUVs and BEVs are surging


11

2023 ID Aero Wagon

2022 ID Buzz

2021 ID Lounge

2021 ID Aero

2020 Mission E Wagon

2020 Leon CUV 2020 Vision E Coupe

2019 Q4 2020 VW D-MPV* 2020 Vision E

2018 Tiguan Coupe* 2020 Bulli 2020 C-CUV e-tron

2018 Skoda C-CUV* 2019 Arteon Wagon 2020 ID Crozz

2019 Skoda B-CUV 2017 T-Roc 2018 Kodiaq GT 2020 Seat C-Hatch EV

2018 T-Cross 2017 Karoq 2018 Atlas/Teramont Cp. 2019 Cayenne Coupe 2019 e-tron Sportback

2020 C-Sedan* 2017 Virtus* 2016 C-Trek* 2018 Seat D-CUV 2018 Q8 2019 ID

2019 C-CUV* 2017 Arona 2016 Q2 2016 Atlas/Teramont* 2017 Panamera Wagon 2019 Mission E

2019 C-Hatch* 2016 Ameo* 2016 Ateca 2016 Kodiaq 2016 Phideon 2018 e-tron

segment

2019 Fox* 2015 Praktik 2015 Altea 2022 Alhambra 2016 VW Phaeton

2019 Mii 3D 2015 Roomster 2015 Eos 2022 Sharan

2019 Mii 5D 2016 Ibiza Wagon 2016 Golf Cabrio

TBD Citigo 3D 2016 Polo 3D 2017 Scirocco

TBD up! 3D 2017 Gol 3D* 2018 Yeti

2017 Ibiza 3D 2019 Beetle

2018 A1 3D 2019 Beetle Cabrio

2020 Spacefox* 2019 A3 3D

2020 Gol 5D* 2019 Rapid

2020 Voyage* 2020 Leon 3D

2020 Toledo

2023 A3 Cabrio

TBD Golf 3D

D E BEV

- Mo

del

s d

isco

nti

nu

ed -

+ M

od

els

add

ed +

low-cost brand A B C

SUV Expansion

EV Wave


Platforms for Battery Electric VehiclesElectrification will be supported in man


12

Conventional

platform

Some conventional

platforms can implement

batteries, but cannot

change the overall

architecture to form a

battery-driven vehicle

assembly.

Multi-energy

platform

Initially designed to cater

to both battery electric

and conventional

powertrain vehicles.

Structure is not

skateboard style but is

more flexible than a

conventional platform

Battery electric

vehicle (BEV)

platform

Platform is designed from

scratch and only for pure

BEV applications.

Skateboard-style

architecture, allows for

more battery capacity and

more interior space with

the same vehicle size.

PSA: CMP PlatformVolvo: CMA Platform Volkswagen: MEB Platform


“Electric Mobility will change the conventional supply chain”* Implication for future BEV platform concepts


13

Traditional Automotive Supply Chain Future BEV Automotive Supply Chain (?)

OEM

Tier 1

Tier 2 Tier 2 Tier 2

Tier 3Tier 3Tier 3

Consumer

OEM

Tier 1

Software

Tier 1

Hardware

Tier 1

Mobility

As A

Service

Co

nve

ntio

na

l

Pla

tfo

rm

Multi-E

nerg

y

Pla

tfo

rm

Vehicle Platform Design

BE

V

Pla

tfo

rm

“Electric mobility will change the conventional supply chain!

It offers the chance to reengage in the client-supplier relationship”

Frank Welsch, Head VW brand R&D, Volkswagen AG

* official VW AG Strategy 2025 announcements

Tier 2 Tier 2

Quicker R&D, Shorter Manufacturing time*

Less variants, Less components needed*

Lower material and distribution costs*

From 2.200 parts for ICE to 900 for battery+motor*


Future Platform StrategiesVolkswagen AG – electrification through platform diversification


14

Conventional

Multienergy

BEV

PPC/PPE

E

D

C

B

A

2017 2018 2019 2020 2021 2022 2023 2024 2025

PQ12

MQB A0

MQB A/B

MEB

MSB

MLB B/C

MLB D

Segment

Source. Volkswagen AG presentation: 5-Year Planning Round: Groundwork to Deliver Strategy 2025


Future Platform StrategiesDaimler– A bet on full battery electric platforms


15

E

D

C

B

A

MFA

MRA LARGE / MHA

MRA MID-SIZE

EVA2

EDISON EDISON

Source: Daimler Capital Market Day 2017

Conventional

Multienergy

BEV

2017 2018 2019 2020 2021 2022 2023 2024 2025

Segment


CLAR WE

(+ FSAR)CLAR

LG

LK

Future Platform StrategiesBMW Group– Learning from past experiences


16

E

D

C

B Li

LG

LK

LU (FAAR) LU (FAAR WE)

Source: BMW Technology Workshop Dec. 2017

Conventional

Multienergy

BEV

2017 2018 2019 2020 2021 2022 2023 2024 2025

Segment


Future Platform StrategiesWhere are the Premium brands heading?


17

Major platform types in use by 2025 for premium brand passenger cars

100%

6%

57%

37%4%

51%

45%

8%

27%

65%

100%

27%

73%

9%

91%61%

39%

100%

100%

Conventional

Multienergy

BEV


Initial Platform cost

BEV launch planning

Parts purchasing

Supplier base choice

Market flexibility(ICE vs. BEV)

Volume planning

BEV „experience“(driveability, range and interior)

BEV Profitability @

a). Low volumes

b). High volumes

Pro and Con of Platform typesRegion by Region outlook


18

Conventional

platform

Multi-energy

platform

BEV

platform

R&

DM

ark

et

Pri

cin

g


POLL QUESTION!

Frankfurt / February 2018

19

Looking at future platform strategies,

which of the following European premium brands is best prepared

for the market environment in 2025?

(either EV boom or EV slump)

Audi

BMW

Mercedes-Benz

Porsche

Volvo

Access this poll on the event app!


BEV Transition on plant levelHow to? The story of VW’s Mosel facility becoming a pure BEV, MEB platform plant


20

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

CY 1997 CY 2001 CY 2005 CY 2009 CY 2013 CY 2017 CY 2021 CY 2025

MEB Vehicles

VW Passt Wagon

VW Passat

VW Golf Wagon

VW Golf

Plant Foundation: 1990

Capacity: 1350 vehicles per day

Employees 7.700

Brands produced Volkswagen

Transformation date: 2019 until 2021

Capacity: increase to 1.600 vehicles per day

Employees: -1000 employees less (retirement)

+400 new employess (trainees)

Brands produced: VW, Audi and SEAT

Investment: Euro 1 Billion (!)

VW Mosel „MEB plant“:VW Mosel Plant

VW Mosel assemply plant production by model



Executive Summary


21

1. European production growth is highly dependent on external factors

Local market demand is decreasing, only Russian will be a dynamic force (but has to be viewed indepently)

Europe is becoming an export hub which is facing a transitional phase to electrification in the 2020s

2. Market Electrification is forced by legislative framework

Europe and China are driving the legislative restrictions, US in selected states

European OEMs are more dependent on China and Europe than others…

3. OEMs have three major possibilites to adapt their platform strategies to an electrified future

Conventional

Multi-energy

BEV

The Challenge for the OEMs and suppliers is to leverage the investment made in electrification by understanding

the potential magnitude of electrification. A difficult task, given the dynamic and emotional nature of that topic

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Presentation Name / Month 2017

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