a new era: transformation in the automotive industry 8 th december 2010, istanbul dr. martin hölz...
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A new era:Transformation in the Automotive Industry
8th December 2010, Istanbul
Dr. Martin Hölz
Partner & Global Head of Automotive
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
2 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
© 2009 Deloitte Touche Tohmatsu
“New” Industry
Future
•Significant structural changes
•Newly-consolidated global OEMs and suppliers
•New companies born from restructuring
•New business models
•Emergence of new technologies for e-mobility
Industry Restructuring
2009-2010
•Capital availability improves
•Large-scale asset sales
•Strong balance sheets lead consolidation
•New players and consolidators emerge, especially in emerging markets
Liquidity Crisis
2008-2009
•Major capacity reductions in NAFTA and Western Europe
•Re-sourcing to stronger suppliers
•Government loans
•Bankruptcy and restructurings
•Liquidations
3 A new era. Accelerating toward 2020 – An automotive industry transformed
The global automotive industry will not be the same as it has been in the past 100 years...
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The future of the automotive industry will have significantly different characteristics
• Vertically integrated structure
• Sales channels are monopolized by OEM’s
• High entry barriers for new“players”
• High capital requirement
• High dependencies between suppliers & OEMs
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• Highly flexible, project-oriented structure
• Multi-channel & multi-brand approach
• New “players“ are established to achieve new mobility concepts
• Still high capital requirement for technology-innovation
• Increasing supplier autonomy and power
• New generation of more environment friendly vehicles
Traditional Future perspective
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
With the transformation to e-mobility there will be a significant change in the value chain of the automotive industry
Key Points
• Shift in profit allocation from assembly to information technology and components
• New “players“ from different industries such as energy, IT and electronics
• Change from one-to-one towards multi-multi structure
• Lower entry barriers
Initiated by automaker integration
Affiliated Supplier
Affiliated Importer /
Dealer
Automaker A
Affiliated Supplier
Affiliated Importer /
Dealer
Automaker B
Affiliated Supplier
Affiliated Importer /
Dealer
Automaker C
Initiated by various players’ specialization
Sal
esM
anu
fact
uri
ng
Par
tsA
ssem
bly
R&
D
Automaker A
Automaker B
Automaker C
Independent Research Companies(e.g. Engineering Companies
Independent Suppliers(e.g. Battery, Motor, Inverter suppliers)
Independent Multi-brand Dealers
Value Chains
Conventional Vehicle EV
5
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
6 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Most of the OEMs have already invested in different e-mobility technologies
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Manufacturer Global Automobile Sales (10.000 units in 2009)
Investment in Technology
FiskerBollore
Th!nk
HV pHV EV FCV
ToyotaGMVWFordHondaPSANissanHyundaiRenault
SuzukiFiat-Chrys.
DaimlerDongfengBMWOpelMazdaMitsubishiDaihatsuTataBYDFAW
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Question: From whom would you be most likely to purchase an EV?Question: From whom would you be most likely to purchase an EV?
Companies with current models or models launching this year
Other companies
% o
f p
eop
le%
of
peo
ple
The companies which already invested in e-mobility related topics are leading in the customer preferences
Brand Preference (Example from Deloitte US-study)
Highlights
• Car-buying is brand driven – trust is important
• Toyota, Honda, and Ford have a high green brand equity from hybrid sales
• Toyota, Honda, and Ford have a higher likelihood of success in e-mobility
• Nissan and Chevrolet will face challenges due to the burden of educating consumers
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©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
• Tesla Motors Case in Silicon Valley‒ Managed by founder of an IT venture-company
‒ Hires talent from the aerospace and IT industry
• New Chinese Entrants (Baoya, Shifeng, etc.)
New comers from different industries have already started to enter the car-manufacturing business
Tesla Roadster
Baoya EV
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Battery Motor Inverter ASSEMBLY
18650 type
Japanese manufacturer
Taiwanese companies
Main Components are Procured
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Alliances with companies from different industries against new comers and threats will be another critical decision for OEMs
Key Points
•How to manage the threat for lack of new technological know-how
•In-house development vs. strategic alliances with suppliers, IT and electronic companies
•Strategies against new comers from different industries like electronics & energy
Investors Battery Comp. OEM supply
Toyota
Panasonic
Honda
GS Yuasa
Mitsubishi Motor
Mitsubishi Corp.
Nissan
NEC
NEC - Tokin
Panasonic EV Energy
Toyota
Sanyo Electric
Blue Energy
Lithium Energy Japan
Automotive Energy Supply
Honda
Mitsubishi Motor
Nissan
Fuji Heavy
(Investment Ratio)
60%
40%
100%
49%
51%
51%
15%
34%
51%
42%
7%
(Plan)
(Plan)
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Illustra
tive
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
11 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The quite simple structure of EV’s and new business models enable new players to enter the manufacturing of cars
• Case 1: Taiwan’s Hua-chuang Automobile Information Technical Center Co. Ltd. developed its own EV without any support from traditional suppliers
‒ Procured key components from electronics manufacturers
‒ Adopted driving module control technology from a venture company in the US
• Case 2: China’s BYD Auto (former mobile phone battery manufacturer) built the capacity to manufacture EVs
‒ Acquired an automobile and an inverter manufacturer
‒ Gathered motor technologies from Chongqing University
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About 95% availability of the resources for battery manufacturing (esp. noble earths as dysprosium, terbium) in China, which could lead to a significant
competitive advantage for Chinese battery suppliers!
BYD E6
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
With “modularization-” and “plug-and-play-” concepts the role and power of suppliers in the industry will significantly shift
• Definition of global standards enable “Modularization”
• Connectivity without calibration - “Plug-and-Play”
1. Supply to two or more automakers
2. Achieve economies of scale (similar to semiconductor industry)
3. Mega-suppliers would become profitable, while automakers producing relatively small volumes of EVs would be less so
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BatteryBattery MotorMotor InverterInverterCPUCPU HDDHDD Graphics
Graphics
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
14 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Many countries have already set challenging goals for the penetration of HV/EVs.
Goals for HV/EV Sales
Goals for the penetration of next generation automobiles (set by Ministry of Environment)• 2020: sell 2.3 M. vehicles (HV 1.45 /EV 0.51 M)
retain 13.5 M vehicles (HV 9.3 /EV 2 M)• 2030 sell 2.9 M vehicles (HV 1.83/ EV 0.73 M)
retain 26.3 M vehicles (HV 17/ EV 6 M)
Japan
• 2012 : retain 500 K HVs, 100 K EVs• 2020 : retain 18 M HVs, 4 M EVs• Long Run: retain 70 M HVs, 50 M EVs
China
• Plans for penetration of 1 M pHVs by 2015
USA
( Example)• 2020 : Germany plans to penetrate 1 M pHVs• 2020 : Ireland plans to penetrate 230 K Evs (10%)
EU
15
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Many countries already heavily invested on e-mobility: More than US $44 B.
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Infrastructure and system
• Experimental national city power grid infrastructure charging
• HV / EV development of national standards
• Next generation car / fuel initiative
• Maintenance is promoted by the cooperation of the state government and the private company (California:1 billion dollars investment)
R&D and Manufacturing Support
863 ProjectMinistry of Science and Technology• FY06-08: 8.3 billion yen Development
support to build a finished car• FY08-10: 6.2 billion yen Core
technology development support
Next-gen battery research and development •2009 ~ 2015 / total 21 billion yen
• Car technology program / Hybrid electric system department (every year/ 165 million dollars)
• The next generation battery, EV development, manufacturing, and proof experiment (FY09-/2.4 billion dollars)
• Low-interest loan for gas-snipper production (FY09-/25 billion dollars)
Purchase incentive
• Environmental car purchase assistance plan
• The car green taxation system
• PHV/EV purchase assistance plan (FY11-/7500 dollar or less per unit)
• UK: spend 20 million pounds for infrastructure
• France: Experiment execution of the charge infrastructure maintenance
• Germany: Pilot Charging Stations
• EU Green Car Initiative project • France: R&D assistance for driving
system and battery (FY09-/250 million Euro )
• Germany: R&D assistance of pHV/EV (FY09/115 million Euro)
• UK: FY11-/Max of 5,000 pounds• France: Transfer to HV cars that
passes 10 years or more/FY08-/Max of 5,000 Euro
• Germany: Transfer to low-emission vehicle FY08-09 Max of 2500 Euro Total of 5 billion Euro
Intergovernmental cooperation
China – US
•Establishment of clean energy laboratory
EU – JapanEnergy technology development workshop
Britain – China• A joint research
concerning electrification of the car
Note: The data and information was collected and compiled using various external media resources based on information available from around November 2008 to end of February
Illustra
tive
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
17 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
With the changing preferences and new dynamics, e-mobility will also play a critical role in the future urban transportation
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E-vehicle sharing Case: LISELEC - La Rochelle, France
• 50 EV’s (Peugeot 106 and Citroën Saxo)
• 7 stations across the city
• Membership structure (Membership in Car clubs reached 100.000 in 2009)
Other applications: Petit Renta in Japan, Car Clubs in the UK, Autolib in France and EV-tests in Germany.
Station
• User freedom
• Cheap
• Free parking
• Convenience
• Availability
• Reduce global warming
• Less traffic
Benefits
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Vehicle conversion to social networks
• Transportation Information
o Traffic stream control
o Pricing and payment systems
• Lifelog Business
o Understanding consumer behavior
o Creation of new businesses
• IT and electronics into the car
o Web in the car
o Car to car communication
Technological advancements will increase the appetite of companies like Google, Microsoft, HP, etc. to invest in the automotive industry
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©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
20 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
One of the important challenge of the industry is overcoming the barriers against mass adoption of new generation vehicles...
Source: Deloitte Survey, Interviews and Analysis
Vehicle price
Reliability
Cost to charge
Convenience to charge
Fuel costs
Gov. incentives
Style and appearance
Environmental impact
Foreign oil dependence
Option to lease battery
Larger vehicle availability
Popularity
Question: What would be your main considerations when purchasing an EV?
Question: What would be your main considerations when purchasing an EV?
LowLow HighHigh
Question: What is the top factor that would prevent you from purchasing an EV (% of respondents)?
Question: What is the top factor that would prevent you from purchasing an EV (% of respondents)?
Factors Driving Purchase Factors Preventing Purchase
Six Adoption BarriersSix Adoption Barriers
Familiarity Brand Range Charging InfrastructurePrice and
Ownership Cost
1 2 3 4 5 6
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©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
Content
22 ©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The strategies and policies on e-mobility need to be built based on the needs and alignment of all parties in the automotive value chain
GovernmentCustomer
Automotive Association
Manufacturer & Supplier
Energy Policy
Regulations
Incentives
Manufacturing Strategy
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Infrastructure
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited