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TRANSCRIPT
THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor
industry’ brandline are trademarks of SMMT Ltd
International Business Group
SMMT
13:30,Tuesday13 March, 2012
Investing in Brazil
Market Entry Considerations Diego Chaves – Senior Manager, PwC UK
PwC
Contents
• Why think of Brazil differently?
• Investing in Brazil – Entry methods:
– Sell direct from UK or via distributor/ agent
– Initiate operations in Brazil (Greenfield)
– M&A – Partnership, JV, Acquisition
• Brazilian Automotive Sector
• How can we help
3
December 2011
PwC
Why think of Brazil differently?
PwC
Market entry in Brazil Macroeconomic overview
• Brazil is on the radar of many companies in the global scenario as it market stands as an important growth opportunity.
• Lower and middle class goods segments should present the major potential growth.
5 Source: The economist, Tendências (february/2012) (december/2011), PwC Analysis
GDP growth projections (2010 to 2021)
7.5%
2.8%
3.2%
4.0% 3.7%
4.1% 4.1% 4.0% 3.9% 4.0%
3.8%
3.6%
10 11 12 13 14 15 16 17 18 19 20 21
PwC 6
Market entry in Brazil Why think of Brazil differently?
Market factor Brazilian characteristics
Tax / regulatory • High tax burden • Politically stable but bureaucratic • Protectionism in some markets
Supply chain • Logistical / infrastructural issues • Geographic considerations
Competitive landscape
• Highly fragmented markets, usually with 1-5 large players
Financing • Cheap under the right circumstances
Business practices
• Proximity to customers is critical
Business-specific issues
• Availability of inputs • Technology • Commoditised products vs. differentiated • Demographic considerations
December 2011
PwC
Market entry strategies
PwC
Market entry in Brazil
8
Sell direct from UK or via distributor/ agent
Initiate operations in Brazil (Greenfield)
M&A - Partnership, JV, Acquisition
December 2011
PwC
Market entry in Brazil
9
Sell direct from UK or via distributor/ agent
Initiate operations in Brazil (Greenfield)
M&A - Partnership, JV, Acquisition
December 2011
PwC 10
Positive Points
• Importance of relationships and local presence
• Potential for commercial partnerships
• National content requirements vary depending
on local availability & other criteria
• Currency risk
• Import tax (varies significantly)
• Agency/ distribution considerations
− Acquiring distributor or even ceasing
contract can be difficult
− Branding control
− Exclusivity
Considerations
• Lowest risk
− Cost
− Time
− Convenience
• Technology retention
• Customs time reduced significantly
through an agent
• Logistics issues outsourced
Market entry in Brazil Sales from UK / via distributor/ agent
December 2011
PwC
Market entry in Brazil
11
Sell direct from UK or via distributor/ agent
Initiate operations in Brazil (Greenfield)
M&A - Partnership, JV, Acquisition
December 2011
PwC 12
Positive Points
• Time to reach maturity
− Initial setup – permits, other delays, etc
− Relationships - critical
− Negotiating Brazilian business practices,
complex tax system & bureaucratic burden
• Poor market information increases risk
• Availability of inputs
– Labour (skilled vs. unskilled)
– Special materials / components
• Financing
• Legal & tax structuring
• Labour relations & social security
– Legislation favours employees
Considerations
• Demonstrates commitment to local market
• Technology retention
• National content / local requirements?
− Assemble vs. manufacture
• Certifications
• Control over quality and branding
• Tax/ regional incentives
Investing in Brazil – Entry methods Initiate operations in Brazil (Greenfield)
December 2011
PwC 13
Success Cases
Market entry in Brazil Initiate operations in Brazil (Greenfield)
• In February 2011 Hyundai announced R$ 1 Billion investments for a new plant in Piracicaba – São Paulo
• In Brazil since 2007 • Framework agreement with PB and
contracted by OGX
• In 1999, the 1st Fnac store outside Europe was opened in São Paulo.
• There are 10 FNAC stores in Brazil
But be careful…
• Opened its factory Eldorado do Sul (Rio Grande do Sul) in November 1999
• Negative publicity from slave labour conditions discovered in 2011 with main supplier AHA, from Brazil
• Delays on delivery caused by failure to secure environmental permits
Unnamed EPC provider
• Started its operations in Brazil in 2008
• Figures in the top 10 brokerage houses in the country
• Started the production of iPhones in October 2011 in Jundiai – SP
• Announced that could invest up to US$ 12 Billion
December 2011
PwC
Market entry in Brazil
14
Sell direct from UK or via distributor/ agent
Initiate operations in Brazil (Greenfield)
M&A - Partnership, JV, Acquisition
December 2011
PwC 15
Positive Points
• Poor market information impacts on:
− Identifying & approaching targets
− Valuation difficult
• Valuation “mismatches” very common
− Labour & tax contingencies – due diligence
− Price adjustments hard to introduce
• Deal risks
• National content / quality requirements
− Assemble vs. manufacture
• Quality control (in the case of JVs/ Partnerships)
• Ability / need to retain management
• Cultural / linguistic issues
Considerations
• Instant reward:
− Revenues
− Relationships
− Understanding of market & Brazilian
practices
• Quality control (acquisition)
Investing in Brazil – Entry methods M&A – Partnership, JV, Acquisition
December 2011
PwC 16
December 2011
Investing in Brazil – Entry methods M&A trend analysis Transactions per year in Brazil
Source: PwC deals database
• Foreign Capital present in 39% of transactions (204 deals);
• Private equity was present in 43% of deals to October.
• Primary sectors for deals in Brazil have been IT, Foods, (Petro)Chemicals, Financial Services and Retail
395
337
415389
573
722
645 644
797
346
274313 317
453
576 569
510
634611
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Jan to Dez Jan to Oct
From 2002 to 2005 an average of 384 transactions per
year were announced.
From 2006 to 2009 an average of 645 transactions per
year were announced.
PwC
Brazilian Automotive Sector
PwC
15.0
8.4 8.0
5.8
4.4
3.4 3.1 2.5 2.4 2.2
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Chin
a
US
A
Japan
Germ
any
South
Kore
a
India
Bra
zil
Mexic
o
Spain
Fra
nce
World Sales and Production
18 Source: Q1 2012 Autofacts, Anfavea, AutoData, PwC Analysis
Production by country – (2011)
[million units]
Sales by country (2011)
[million units]
Brazil is the 7th in the production rank and the 5th market in sales.
14.2
12.7
4.1 3.5 3.4
2.9 2.6 2.1
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Chin
a
US
A
Japan
Germ
any
Bra
zil
India
Fra
nce
UK
PwC
World fleet
Source: Anfavea, Autofacts, Analyses PwC
World fleet by country Automotive density by country
[inhabitants per vehicle] [million units]
0
50
100
150
200
250
300
1998
2008
0
1
2
3
4
5
6
7
8
9
10
1998
2009
2020
Currently, Brazil has a density of 7 inhabitants per vehicle with great potential when compared to countries such as Argentina in South America
and mature markets.
19
PwC
Brazilian market demand forecast
CAGR: Compound Annual Growth Rate Source: Anfavea, Tendências (february/2012), PwC Analysis 20
3.4 3.7 3.9 4.1
4.4 4.7
5.0 5.3
5.7 6.0
0.0
2.0
4.0
6.0
8.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
PwC most probably scenario projects domestic sale of 4.4 million cars in 2015 and almost 6 million in 2020, an average growth of 6.5% p.y. in the
period.
Demand forescast
[million units]
PwC
More than US 20 billions was announced in investments to increase capacity in more than 1.5 million units until 2015.
21 Source: Automotive Business, Autofacts, PwC Analysis
Brand Investment Location Conclusion (estimated)
Value invested (US$B)
New plant Jacareí (SP) 2015 0.40
New plant and investments in Betim's plant
Goiana (PE) and in Betim (MG) 2014 5.90
Investments in capacity increase São Bernardo do Campo, Taubaté (SP) and
Camaçari (BA) 2015 2.60
Investments in capacity increase São Caetano do Sul, São José dos Campos, Mogi das
Cruzes (SP), Gravataí (RS) and Joinville (SC) 2012 1.70
Nem plant Piracicaba (SP) 2012 0.60
New plant construction with Sergio Habib partnership
Camaçari (BA) 2014 0.53
Expand Catalão’s plant and products portfolio
Catalão (GO) - 0.59
New plant in Resende Resende (RJ) 2014 1.50
Products development and plant capacity expansion
Porto Real (RJ) 2015 2.20
Products expansion in São José dos Pinhais’plant
São José dos Pinhais (PR). 2015 0.88
Investment to produce Jimny model Itumbiara (GO). - 0.06
New plant Sorocaba (SP) 2012 0.60
Investments in plants in São Paulo and Paraná
São Bernardo do Campo, Taubaté, São Carlos (SP) and São José dos Pinhais (PR)
2016 5.20
PwC
Automotive Sector: Key takeaways
• Scenario is positive for the Brazilian local market.
• Industry has began a major investment cycle (especially in products and increase in capacity)
• Main challenges: competitiveness and Brazil’s Cost.
• High taxation is still a major obstacle (including the difficulty in using tax credits and bureaucracy)
• Doubts about the suppliers capability to keep up with the expected growth
• Opportunities for new comers and imports: Koreans and Chinese, mainly
• Government and industry must work together, powering the local industry with investments in activities that increase the competitiveness and innovation
22
PwC
Auto parts: Key takeaways
23
• The Brazilian automotive market presented strong growth in recent years and the outlook is to maintain this positive scenario. This favorable situation has boosted the announcement of a series of new investments in Brazil, which should add more than 1.5 million vehicles/year in production capacity by 2015.
• This scenario drives the development of new technologies and partnerships between automakers and auto parts producers to meet the increasingly demanding market. The growth of the internal market also leads to increased demand for aftermarket parts.
• On the global scene, the competitiveness has been a critical factor. Therefore, the new investments announced in Brazil are increasingly based on the model of large industrial complexes. This model also benefits manufacturers of auto parts since the possibility of creating shared service centers, sharing infrastructure and general services generates a significant reduction in costs.
• Additionally, the search for a more competitive and further development of new technologies should accelerate the process of merger and acquisition in Brazil, with the formation of large groups of foreign and domestic firms.
• The New Automotive Policy (2011) requires 65% of regional local content (Mercosur) in order to not increase the Federal VAT (IPI) in 30pp. This a great opportunity for local producers
PwC
PwC – How can we help
PwC
What services we can offer
25
December 2011
Direct sales Entry execution
Post entry support
Direct Sales
• Tax evaluation & support
• Market research and options evaluation
Greenfield
• Market entry and options evaluation
• Market interviews
• Business planning and modelling
• Site identification
• Tax evaluation
• Full suit of PwC services
Audit
Tax
Advisory
4,000 people in 16 offices
M&A
• Support for M&A strategy development
• M&A target identification
• Approach of M&A targets and options evaluation
• Negotiation & financial advisory acquisitions
• Finance & Tax due diligence
• Commercial due diligence
• UK Bribery act advice
• Post deal consulting
(delivering deal value)
Decision making Entry execution Post entry support
Legal, Tax and HR structuring & planning
Cro
ss bo
rder a
pp
roa
ch (B
razil/U
K)
PwC 26
Contacts
Brazil
Rogério Gollo Deals Team Leader Tel: +55 11 3674 3851 Email: [email protected]
Marcelo Cioffi Automotive Sector Leader Tel: +55 11 3674 3621 Email: [email protected]
Paulo Petroni Consulting/Advisory Tel: +55 (11) 3674 3338 Email: [email protected]
UK
Diego Chaves Senior Manager Tel: +44 1895 522 308 Email: [email protected]
David Cooke Automotive Sector Leader Tel: +44 1895 522 107 Email: [email protected]
Valter Deperon Tel: +44 2078 041 165 Email: [email protected] December 2011
Thank you for your time!
© 2010 PwC. All rights reserved. Not for further distribution without the permission of PwC. "PwC" refers to the network of member firms of
PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a
separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not
responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any
way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm's
professional judgment or bind another member firm or PwCIL in any way.
DOING BUSINESS IN BRAZIL
The Society of Motor Manufacturers
& Traders Ltd
13th March 2012
1. Legal Structure
Brazil is a Federal Republic , comprised of the Federal
District, 26 states and over 5000 municipalities. The
federal Capital is Brasilia located in the Federal District.
The legal system is based on codes and legislation
enacted by the legislative power at the federal, state and
municipal Levels.
The basic law of the country is the Brazilian Constitution which establishes:
(i) The system of government;
(ii) The attribution of powers to the Legislative, Executive and Judiciary branches of government;
(iii) The legislative competence of the federal, state and municipal administrations.
2. Judicial Structure
Brazil is a civil law jurisdiction and decisions are based
on the application of statutory laws.
Where there is no specific statutory provision, the
courts may decide on the basis of analogy and general
uses.
3. Business Structure
There are 2 main types of companies that are used
for most business operations in Brazil:
• ‘sociedade anonima’;
• ‘sociedade limitada’.
“Sociedade Anonima – S.A.”
• is the equivalent of the corporation in the US and
the Public Limited Company (PLC) in the UK .
“Sociedade Limitada - LTDA”
• is the equivalent to closely held company in the US
and a Private Limited Company in the UK.
4. Foreign Investment
The Central Bank of Brazil is the agency in charge of:
(i) Managing the day-to-day control over foreign capital flow in and out of Brazil;
(ii) Setting forth the administrative rules and regulations for registering investments.
The Central Bank of Brazil is the agency in charge of:
(iii) Monitoring foreign currency remittances;
(iv) Allowing repatriation of funds.
It cannot restrict the remittances of funds from the risk capital or loan which are based on registration with the Central Bank, through its Electronic System of Registration.
5. Labour Aspects
The Labour system in Brazil is very particular and
regulate the details of labour-management relations.
The employees’ rights are compiled in the
Consolidation of Labour Laws – CLT and the basic
labour rights granted are:
(i) Legal limit of regular working hours – 44 per week or 8
hours/day;
(ii) Paid vacation of up 30 calendar days and additional payment of
1/3;
(iii) Minimum wage;
(iv) 13th salary and overtime payment;
(v) Prior notice period;
(vi) Maternity and paternity leave;
(vii) Weekly remunerated rest.
6. Distritution and Agency Agreements
• Agency (relationships goes until final client);
• Distribution (no relationship with final client);
• UK x BR Law (service of papers in case of claim).
7. UK BRIBERY ACT 2010 - General Offences
• Offering, promising or giving a bribe
• Requesting, agreeing to receive or accepting a bribe
• Relevant function or activity
Public nature
Connected with business/trade/profession
In the course of employment
By or on behalf of a body of persons
• Bribery in relation to
Companies
Individuals
Senior officers who consent or connive with bribery
UK BRIBERY ACT 2010 Extra Territorial Jurisdiction
Bribery committed anywhere in the world by any person with a ‘close
connection’ with the UK:
• British Citizen or individual ordinarily resident in UK
• UK body corporate
• Scottish Partnership
• UK company
Failure to prevent bribery being committed by an ‘associated’ person or
company anywhere in the world for or on behalf of:
• UK company
• Any company operating in the UK
PAGE 42 THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED
Erika Azevedo Section Manager for Advanced Engineering
UKTI Brazil
Conference call: Introduction and Q&A with Erika
PAGE 43 THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED
Tom Thorelli
Partner
Thorelli and Associates
Successful formulas for doing business in
the US: a lawyer’s perspective
North American Vehicle Production
Forecasting & Industry Analysis
IHS Automotive
March 13 2012
SMMT International Business Group
71 Great Peter Street
London SW1P
North American Automotive Outlook: Recharging for Long-Term Growth
Presentation Outline
45
• U.S. Economy
• Sales Outlook
• Production Outlook
• Market Dynamics
• Summary
Copyright © 2011 IHS Inc. All Rights Reserved.
• The most likely outcome remains continuing (but modest) growth.
• Consumers will spend cautiously in order to rebuild their finances.
• Business investment, exports, and consumer durables are driving the expansion.
• Pent-up demand for housing will eventually lead to stronger economic growth.
• Fiscal tightening is coming, but the big issues (entitlements and taxes) will not be
settled until after the 2012 elections.
• The major global risks are:
• Financial contagion from the Eurozone sovereign-debt crisis
• An oil-price shock resulting from supply disruptions in the Middle East
• A hard landing in China caused by the bursting of real-estate market bubbles
• The probability of another US recession has diminished to 25%.
Bottom Line for the US Economy
Copyright © 2011 IHS Inc. All Rights Reserved.
(Index, over 50 indicates expansion)
Source: Institute for Supply Management (ISM)
Supply Managers’ Indexes Signal Growth
47
Copyright © 2011 IHS Inc. All Rights Reserved.
2011 2012 2013 2014
Real GDP 1.7 2.1 2.3 3.3
Consumption 2.2 2.0 2.0 2.2
Residential Investment -1.4 9.0 15.9 26.0
Business Fixed Investment 8.6 6.8 5.9 7.7
Federal Government -2.0 -1.9 -3.4 -2.8
State & Local Government -2.3 -1.7 -0.7 0.3
Exports 6.8 4.3 7.1 7.6
Imports 5.0 3.6 3.7 4.1
(Percent change)
US Economic Growth by Sector
48
Copyright © 2011 IHS Inc. All Rights Reserved.
2011 2012 2013 2014
Industrial Production 4.1 3.8 2.9 3.6
Payroll Employment 1.2 1.5 1.5 1.7
Light-Vehicle Sales (Millions) 12.7 13.6 14.7 15.6
Housing Starts (Millions) 0.61 0.74 0.99 1.39
Consumer Price Index 3.1 2.0 1.8 1.9
Core CPI 1.7 2.0 1.9 2.1
Refiners’ Acquisition Oil Price ($/barrel) 102 110 113 111
Federal Funds Rate (%) 0.1 0.1 0.1 0.1
10-Year Treasury Yield (%) 2.8 2.2 2.7 2.9
(Percent change unless noted)
Other Key US Indicators
49
Copyright © 2011 IHS Inc. All Rights Reserved.
2011 2012 2013 2014
Real Consumption 2.2 2.0 2.0 2.2
Real Disposable Income 0.9 1.3 1.5 2.9
Real Household Net Worth 1.5 0.0 2.7 3.2
Payroll Employment 1.2 1.5 1.5 1.7
Real Wage Rate -0.7 0.2 0.4 0.4
Consumption Price Deflator 2.4 1.5 1.6 1.8
Light-Vehicle Sales (Millions) 12.7 13.6 14.7 15.6
Home Sales* (Millions) 4.11 4.49 4.97 5.47
(Percent change unless noted)
* Single-family new and existing homes
The Consumer Markets Environment
50
Copyright © 2011 IHS Inc. All Rights Reserved.
(Percent change)
Consumer Spending Growth Is Limited by
Weak Disposable Income Gains Through
2013
51
Copyright © 2011 IHS Inc. All Rights Reserved.
• Pessimistic Scenario: Double-Dip Recession (25%)
• Europe’s sovereign-debt crisis leads to a global credit crunch.
• Policymakers allow the payroll tax cut and emergency unemployment
insurance benefits to expire in March 2012.
• Consumers retrench as asset values and real incomes erode.
• The US housing recession drags on; credit remains tight.
• Optimistic Scenario: Recovery Reignites (20%)
• The Eurozone crisis is resolved convincingly through institutional, fiscal, and
structural reforms.
• Credit channels function more smoothly, supporting investment.
• Confidence revives, leading to more spending and hiring.
• Robust growth in emerging markets fuels exports.
Risks to the US Forecast
52
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 53
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 54
• Pent-up demand is driving the auto recovery
• Consumer confidence has plunged, but it appears as if the consumer attitude to new vehicle purchases remains favorable
• The recent sales numbers have exceeded expectations
• Retail, rather than fleet, remains the main driver
• Sales have improved, as Japanese cars return to the showrooms, but there are still some issues of availability
• Incentive spending has risen modestly, as inventories rebuild
• There has been an increase in lease activity
• Auto credit availability is improving
• The used car and truck market remains very strong
• Cost pressures will return but industry profits are good
Bottom Line – A weak economy will hurt the release of pent up demand, slowing not derailing, the auto market recovery
US - Auto Market Overview
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 55
Intention to Buy New Vehicle in 6 Months
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
6 Month Moving Average Actual
(Percent Yes)
Conference Board
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 56
U.S. Light Vehicle Inventory — Units
Months — Seasonally Adjusted
(Units in thousands)
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 57
U.S. Light Vehicle Inventory — Days Supply
30
40
50
60
70
80
90
100
110
120
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
(Days Supply)
Months — Seasonally Adjusted
Light Trucks
Cars
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 58
8
10
12
14
16
18
20
22
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Actual Forecast
Months
(Units in millions)
United States — Car & Truck Sales, SAAR
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 59
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
1990 1995 2000 2005 2010 2015 2020Current Old History & Forecast Pessimistic - 30% Optimisitc - 15%
(Percent Change)
Real Gross Domestic Product (GDP) Growth
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 60
8
10
12
14
16
18
1990 1994 1998 2002 2006 2010 2014 2018
8
10
12
14
16
18
Feb 2012 Forecast July Forecast Pessimistic - 30% Optimisitc - 15%
(Units in millions)
U.S. Light Vehicle Sales
2008: 13.2M units
2009: 10.4M units
2010: 11.6M units
2011: 12.7M units
2012: 13.6M units
2013: 14.7M units
2014: 15.6M units
2015: 16.2M units
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 61
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
TRANSPLANT IMPORT
(Market Share)
Foreign Manufacturers:
Share of U.S. Market — Sales
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 62
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved.
(Real trade-weighted dollar index, 2005 = 1.00)
The Dollar’s Real Exchange Value Will
Depreciate Against Emerging Markets’
Currencies
63
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved.
(Percent change, nonfarm businesses)
Unit Labor Costs Will Rise About 2% Annually
64
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 65
• Downturn prompted tough
decisions and industry is far
better positioned for
profitable growth ahead
• Output in 2011 was limited
due to Japan tragedy and
Thailand flooding
• Constrained growth outlook
• Output recovers 5.8M units!
• Inventory building planned
• Demand strengthening
• Production localization
efforts are realized
Pro
du
ctio
n in
Mill
ion
s
Short-Term Outlook North American Light Vehicle Production
17
.2
15
.5
16
.4
15
.9
15
.8
15
.8
15
.3
15
.1
12
.6
8.6
11
.9
13
.1
14
.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
• Sluggish recovery
• Sustained high
unemployment
• Real estate issues
• Gas prices ~USD3.60/gal
• Build-to-demand model
• Reduced inventory
carrying; 60-day target
• New product cadence
• Favorable interest rates
• Conservative build with
additional upside support
66
8.6
11.9
13.1
14.4
15.2
14.9
15.4
12.7
13.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2009 2010 2011 2012 2013
Pro
du
ctio
n (
mill
ion
s)
Base Optimistic Pessimistic
Production Forecast Baseline Outlook
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
• Pace of recovery quickens
• Household wealth
• Consumer confidence
• Unemployment
• Housing
• Gas prices ~USD3.60/gal
• Postponed purchase
necessitated - scrappage,
avg. vehicle age +10 yrs
• Used-vehicle market
overheating
• Leasing/incentives jump
• Export strength
67
Production Forecast Optimistic Outlook
8.6
11.9
13.1
14.4
15.2
14.9
15.4
12.7
13.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2009 2010 2011 2012 2013
Pro
du
ctio
n (
mill
ion
s)
Base Optimistic Pessimistic
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Negative Outlook
• Consumer confidence
• Household wealth
• Unemployment
• Next foreclosure wave
• Unrest in Middle East, oil
price volatility
• Credit availability slows
• Sovereign debt issues
remain; US-PIIGS*
• US dollar crisis?
• Confidence contagion
• Commodity/supply-chain
68 *PIIGS: Portugal, Ireland, Italy, Greece, Spain
Production Forecast Pessimistic Outlook
8.6
11.9
13.1
14.4
15.2
14.9
15.4
12.7
13.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2009 2010 2011 2012 2013
Pro
du
ctio
n (
mill
ion
s)
Base Optimistic Pessimistic
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Copyright © 2011 IHS Inc. All Rights Reserved. 69
Production Outlook North American Produced Vehicle Exports Bolster Prospects
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2006 2007 2008 2009 2010 2011 2012 2013
Europe
South America
Middle East/Africa
Greater China
Other
• Greater use of global
platforms allows for more
“export ready” product
• Free trade agreements
have made Mexico a
particularly strong export
player
• European sovereign debt
crisis poses a headwind
to some export growth,
yet is offset by shifting
sourcing patterns
• Developing regions drive
higher export prospects
No
rth
Am
erica
n V
eh
icle
Exp
ort
s (
Mill
ion
s)
North American Vehicle Exports by Region
0.74
1.05
0.82
0.99
0.92
1.17
1.38 1.35
Copyright © 2011 IHS Inc. All Rights Reserved. 70
North American Light Vehicle Production 2012 vs. 2011
OEM 2012F
(000s)
2011
(000s) % ∆
∆ Units
(000s)
GM 3,140 3,084 1.8% 56
Ford 2,807 2,725 3.0% 82
Chry/Fiat 2,152 1,998 7.7% 154
Detroit 3 8,099 7,807 3.7% 292
Toyota 1,603 1,256 27.6% 347
Honda 1,461 1,102 32.6% 359
Ren/Nissan 1,272 1,170 8.7% 102
Hyundai 688 612 12.5% 76
Asian 4 5024 4140 21.4% 884
VW 640 555 15.3% 85
BMW 272 275 -1.1% -3
Daimler 154 158 -2.3% -4
German 3 1066 988 7.9% 78
Others 201 200 0.5% 1
Total 14,390 13,135 9.6% 1255
• Toyota and Honda
gain on recovery and
inventory rebuilding
post Japan disaster
• Redesigns assist and
bolster new capacity
• GM output gains as
newer products ramp
up: Sonic, Verano,
ATS, XTS, Malibu
• Cautious demand
growth and export
gains drive macro
production story
• Cadence & localization
yield broad gains
across the region
Copyright © 2011 IHS Inc. All Rights Reserved.
0
2
4
6
8
10
12
14
16
18
20
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
NA Production
Recession
Trend
Similar volume impact on the market, yet downturn is condensed into shorter timeframe
Lagging recovery, yet outlook is helped by population growth and new capacity
16.7 Million
6-Year Contraction
Millions
17.8 Million
15-Year Expansion
Production Outlook Expansion and Contraction
Copyright © 2011 IHS Inc. All Rights Reserved.
Market Structure: Long-Term North American Production
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Y-O-Y %
Ch
angeO
utp
ut (
Mill
ion
s)
United States Mexico Canada Change
CAGR
4.1%
CAGR
4.2%
CAGR
-1.7%
2011 – 2019
72
Copyright © 2011 IHS Inc. All Rights Reserved.
4.95.7
4.2
1.9
3.1 3.1 3.5 3.5
4.5
4.7
2.9
1.9
2.7 2.83.0 3.1
2.9
2.9
2.5
0.9
1.9 2.2
2.3 2.3
2.0
2.5
4.2
2.9
4.1
4.9
6.4 6.5
0.5
0.6
0.7
0.5
1.0
1.1
1.3 1.4
0.7
0.8
0.7
0.5
0.3
0.3
0.5 0.6
0
3
6
9
12
15
18
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Millio
ns
73
Production Outlook North American Light Vehicle Production by OEM
• Production outlook is gaining, inventory position and export activity assist
• All manufacturers are poised to post gains; favors OEMs with further capacity expansion
plans: BMW, Hyundai, VW, Toyota & Honda
• Global product/platform strategies enable competitive sourcing shifts
15.6
17.1
German 3
Asian 4
Chrysler/
Fiat
Ford
General
Motors
Others
8.6
14.4
17.4
15.1
17.2
13.1
Copyright © 2011 IHS Inc. All Rights Reserved.
OEM Production Analysis 2011-2019
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
74
Toyota
Honda
R/N
GM
Hyundai
VW
Other
Chrysler/Fiat
Ford
Daimler
Contribution to Growth
2011 to 2019
Copyright © 2011 IHS Inc. All Rights Reserved. 75
Globalizing North America North American Production by Global Segment
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
20
11
2012
2013
2014
2015
2016
2017
A-Segment B-Segment C-Segment
D-Segment E-Segment Full-Frame
• A-Segment sourcing arrives
with Fiat 500
• B-Segment output surges
Mexico as export hub
• Detroit 3 continue to ramp
up global platforms
• Full-frame share cut in half
within one decade,
subsidies erode, yet still
holds 20% of the market
• Fuel price volatility raises
consumer awareness
• C- and D-Segments reach
critical mass – will aid profit
picture
Copyright © 2011 IHS Inc. All Rights Reserved.
Production SAAR by Region
0
5
10
15
20
25
Ap
r-07
Au
g-
De
c-0
7
Ap
r-08
Au
g-
De
c-0
8
Ap
r-09
Au
g-
De
c-0
9
Ap
r-10
Au
g-
De
c-1
0
Ap
r-11
Au
g-
De
c-1
1
Ap
r-12
Au
g-
De
c-1
2
EU
GC
JK
NAF
SA
SEA
EU
GC
JK
NAF
SA
SEA
M Vehicles
Note; Thicker line is Trend of SAAR
S America
S Asia
NAFTA
China
Europe
Jap & Korea
Copyright © 2012 IHS Inc. All Rights Reserved. 77
Future Powertrain Technology Trends
• VVT almost standard on any new engine; many migrating to DOHC, twin independent design
• GDI and gas boosting both ramp up quickly. The initial rollout is being led by American and
German manufacturers, although the others aren’t far behind
• Stop/Start technology growing, although fuel economy gains are in question given US test cycle
• Diesel and hybrid still relatively low-volume players in North American market
0
2
3
5
6
8
10
11
13
14
16
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Un
its (
Mill
ion
s)
Variable Valve Timing
Gas Direct Injection
E85
Gas Boosted
Cylinder Deactivation
Diesel
Hybrid/EV
Stop/Start
Advanced Transmissions*
North American Installations
* 6+ Speed/CVT/DCT/EV
Copyright © 2011 IHS Inc. All Rights Reserved. 78
OEM Review Detroit 3 – Leveraging Strengths
0%
5%
10%
15%
20%
25%
30%
35%
GM
Ford
Chry/Fiat
North American
Production Share (%)
• Strong portfolio of fresh products, global breadth
• Cautious market perspective,
• Touts technology: Hybrids, EVs, SYNC®, Ecoboost
• Asia strategy post Mazda; Volvo-tech residuals
• IPO, risk/reward profile remains fluid (Trucks/SUVs)
• Trucks: balance sheet boost, plan segment rebound
• Strong new global products; segment advances
• Luxury focus, Cadillac must make BRIC push
• Much progress-hurdles remain, launches pending
• Interim product updates, dated vs. global field
• Grand Cherokee strong - global Jeep focus
• Aggressive plans, must conquest - Wildcard
Copyright © 2011 IHS Inc. All Rights Reserved. 79
OEM Review Asian 4 – Uphill Battle
• Slow rebuilding process, still formidable, vast
resources and global scale, new Camry
• Renewed urgency; growth returns, tempered
• Tupelo launch - 2011; renewed product focus
• Product misses - protracted impact; must rebuild
• Core C-segment strength must keep pace
• Missed opportunity for segment expansion
• Leaf is PR coup, but core entries are aging
• Export strength: Smyrna and Mexico expansion
• Truck sourcing shift – Pathfinder, more to come
• Hyundai/Kia – product hits, Montgomery #2
• Momentum exploits missteps of competitors
• Value proposition maintained, aiming higher
0%
2%
4%
6%
8%
10%
12%
14%
16%
Toyota
Honda
R/N
Hyundai
North American
Production Share (%)
Copyright © 2011 IHS Inc. All Rights Reserved. 80
OEM Review Next Steps and A New Start
• US expansion continues, high export strength,
broad appeal to BRIC, developed markets
• X4 builds on CUV expertise, broadens appeal
• $2.0B investment - C-Class sourcing, CUV
expansion; export strengths
• Redesigned M-Class; R-Class refresh extends
lifecycle due to BRIC demand
North American
Production Share (%)
• Builds on unique product attributes, bolsters
loyal consumer base despite weak market
• Strong ties to Toyota, further sharing expected
0.0%
0.5%
1.0%
1.5%
2.0%
BMW
Daimler
Fuji Heavy
Mazda• Steps out on own, Mexico site launches with
Mazda 3, followed by Mazda 2, more possible
• Mexico serves as growth & export platform, yet
weak product scale will hinder viability
Copyright © 2011 IHS Inc. All Rights Reserved. 81
Summary
• Global settings tempered in 2H 2011, chilled by EU concerns
– Economic headwinds persist yet consumer position improving; US demand
closed strong in 4Q, bolsters output gain of ~1.26 million in 2012
– Aggressive OEM build plans anticipate stronger sales recovery
– Supply chain continuity – tested post Japan tragedy, demand outlook showing
cautious strength, potential tripwires remain
• Globalization of North American industry – offers risks & rewards
– Competitive dynamics alter future landscape - favors global OEM strategy
• Regulatory Changes drive Investments: Safety, Convenience, Performance
– Crucial to distinguish between regulations and customer wants/needs
• Long-Term Prospects Intact – Demand & Output to Surge
– OEMs and suppliers must leverage time to fine-tune growth strategies
CSM Worldwide + IHS Global Insight Automotive Group = IHS Automotive
Presenter:
Stewart Pedder
Managing Director, SupplierBusiness
IHS Automotive
+44 (0)1780 484567
Forecast Author:
Mike Jackson
Senior Manager, Automotive Forecasting
IHS Automotive
+1 248 465 2833
Economics:
Sara Johnson
Senior Research Director, Global Economics
IHS
+1 781 301 9115
www.ihs.com
www.supplierbusiness.com
www.hybrid-ev.com
2020 Vision of the Global Automotive
Industry
Pietro Boggia
Principal A&T– Frost & Sullivan
13th March, 2010
84
Table of Contents
1 Global megatrends that will impact mobility in the future 3
2 From macro to micro mobility 6
3 Outlook of global automotive industry by 2020 9
4 Top technology opportunities by 2020 12
5 Global opportunities in automotive aftermarket 15
Q&A
85
Global Mega Trends that will Impact Mobility in the Future
Car Sharing/Car
Pooling
Geo-Socialization
And Social Media
New Micro Mobility
products
Integrated Mobility
Solutions
E-Mobility
Connected and Wireless
Planet
Sustainable Public
Transportation and BRT
High Speed Rail
Urbanization Mega and Smart Cities
New Business Models
(Value for Many)
Power to the Middle Class
and Gen Y
86
Future Innovation in Mobility
Known Solutions
Met Needs Unmet Needs
Unknown Solutions
Technology Innovation
Traffic Prediction system
Parking Search assistance
Cashless Payment
Improvement
Micro cars
Electric Cars
Electric Bikes
Application Innovation
Car Sharing
Car Pooling
Bike Sharing
Wild Innovation
Mobility Integration
New Mobility Products
Motorized Mover
Two seated Electric Car
87
2020 Key Predictions: 2018 will be the tipping point in Automotive Industry
Volkswagen to emerge as the Numero-Uno OEM by 2020 with 12 per cent global market share.
All full hybrids will become plug-in hybrids in the developed world, and 85 per cent of cars in European Union to have start-stop systems.
Emergence of true global platforms with global OEMs collectively having under 150 platforms (30 per cent reduction in platforms from today).
Consolidation of Chinese Auto OEMs resulting in about 10 Major local OEMs in China.
There will be over 1.2 billion cars on road.
Intelligent / City cars to dominate 50 per cent of cars will have emissions less than 90 grams.
Two Chinese and one Indian OEM will be in the Top 15 Global OEMs.
Source: Frost & Sullivan analysis.
2020 Vision of Global Automotive Industry: Overview (World), 2020
88
The Future Is Multi-Modal Commuting, Combining Door to Door
Solutions Using Dedicated Mobility Platforms
2020
City
Suburbs
Intercity
TR
AV
EL D
IS
TA
NC
E
TRAVEL DISTANCE Destination
Public Transportation
Private Cars
Shared Mobility
Micro-mobility
Intercity Bus
Intercity Train
Shared Mobility
Door to door integrated, multimobility a reality in future
Vehicle manufacturers to offer smart mobility solutions ensuring first and last mile connectivity
.
Government to club public transport with bike / two wheeler/car rental schemes
Market will see new players in market termed as “Mobility Integrators” Source: Frost & Sullivan
CAR OWNERSHIP
89
One-wheeled
One-seating
One-wheeled
One-standing
Two-wheeled
One-standing
Bike-type
Two-wheeled
One-standing
Segway-type
Two-wheeled
One-seating
Bike-type
Two-wheeled
Two-seating
Segway-type
Two-wheeled
Four-seating
Segway-type
Three-wheeled
One-standing
Scooter-type
Three-wheeled
One-seating
Motorcycle-type
Three-wheeled
One-seating
Wheelchair-type
Three-wheeled
One-seating
Three-wheeled
Two-seating
Motorcycle-type
Four-wheeled
One-seating
Car-type
Four-wheeled
Two-seating
Car-type
Four-wheeled
Three-seating
Car-type
OP
EN
- TO
P
CL
OS
ED
- TO
P
Micro Mobility Product Types The open-top models are largely there to target conventional bicycle, engine-driven scooter and
motorcycle users; while the closed-tops are targeted at conventional car users
90
Overview of Micro Mobility Models by Key Global Mainstream OEMs: About 125 micro mobility models announced by various stakeholders globally
One-W
heel
Four-
Wheel
Thre
e-W
heel
Tw
o-W
heel
General
Motors Ford Chrysler Renault Volkswagen Audi BMW Daimler Fiat PSA Hyundai Honda Toyota Nissan Suzuki Geely
3 4 1 5 8 6 12 4 2 13 10 13 6 6 5 2
4
32
31
33
100
Total
Total
P = Production ready
Micro Mobility Market : Key Mainstream OEM Models (Global), 2008-2018
Source: Frost & Sullivan analysis
91
0
10
20
30
40
50
60
70
80
90
19
50
19
60
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
30
26 25
28.9
1973 1974 1975 1976
36.335.1 35.5
34.2
1990 1991 1992 1993
41.340.1
41.4
2000 2001 2002
1 2
3
4
Global Automotive Industry (1950 to 2020): 2010 being a Turnaround Year for
the Auto Industry, the Future is bright with the push from emerging economies
Un
its (
Millio
n)
2020 vision of Global Automotive Industry : Passenger Cars Production History (World), 1950 – 2020
Source: American Automobile Manufacturers Association, DRI-WEFA, and Global Insight; J D Power, Frost & Sullivan
1 1973 – 75 2 1990 – 93 3 2001 – 03 4 2007 – 10
-1973 Oil Crisis driven by OPEC em
bargo on oil exports to west, leads t
o global economic slowdown
-The 1987 stock market crash, follo
wed by the 1990 Gulf war and a res
ulting rise in Oil prices affected glob
al industrial production
-Dot-com bubble bursts driving the
economy down
-September 11 attacks on the US fu
rther causes an economic contracti
on
-US & Europe had witnessed a collaps
e in economy in end of 2008 followed b
y the fall of Lehman Brother.
-US showed recovery in 2010. Europe
economy is yet to recover.
5654
47
57
2007 2008 2009 2010
- Emerging countries will drive the global sale.
- BRIC is expected to contribute a share of 33% of global GDP by 2020 and largest market for automotive industry.
Passenger Car CAGR (2010 – 2020) : 4.66%
92
Global Automotive Sales 2020 - Regional Overview: Dominance of Asian count
ries in automotive industry will continue beyond 2020 with a growth CAGR of 5.58%
Note: Africa - South Africa
Asia - Australia, China, India, Indonesia, Japan, Korea, Malaysia, Philippines, Taiwan, Thailand, New Zealand
Eastern Europe – Bulgaria, Bosnia, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine
Middle East – Egypt, Iran
North America - Canada, Mexico, USA
South America - Argentina, Brazil, Chile, Colombia, Ecuador, Uruguay, Venezuela
Western Europe - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK
Note: All figures are rounded; the base year is 2010
Source : JD Powers / Frost & Sullivan
70.7 Million Vehicles
2010
~ 110 Million Vehicles
2020 2020 Vision of Global Automotive Industry : Light Vehicle Sales, (World),(2010 – 2020)
The above vehicle sales forecast is for passenger cars and light commercial vehicles (<3.5 t). Vehicle segments included are Basic, Subcompact, Com
pact, Large, Large Plus, Midsize, MPV, Pickup / Truck, Sports, SUV, Upper Midsize and Van
0
10
20
30
40
50
60
Afric a Asia Ea ste rn Europe Middle Ea st North Ame ric a South Ame ric a We ste rn Europe
1 Million
7.3 Million
18 Million
China 29
USA 17.2
Canada 1.9
Brazil 5.3
Note: Vehicle Sales in Million Units
Africa1%
Mill
ion U
nits
2020
Japan 4.9
Iran 2.4
Turkey 1.3
Russia 4.2
Poland 0.8
Mexico 1.6
Argentina 0.7
Germany 3.9
UK 2.8
France 2.8
Spain 1.7
Others 3.9
Others 1.2
UK 2.9
Italy 2.8
2.8 Million
20.7 Million
48.5 Million
8.4 Million
India 7.8
Other 4.1 Korea 1.5
Indonesia 1.1
Other 2
North America
20%
Western
Europe
20%
Eastern Europe
5%
South America
7%
Asia 41%
Others 4%
Middle East 2%
North America
19%
Western
Europe
16%
Eastern Europe
8%
South America
7%
Asia 44%
Others 3%
Middle East 3%
CAGR : 4.56%
Africa 1%
93
0 5 10 15
Tata Group
Daimler Group
Changan Automobile Group
BMW Group
SAIC Group
Chinese Manufacturers
PSA Group
Honda Group
Fiat Chrysler Group
Ford Group
Hyundai Group
Renault-Nissan Group
General Motors Group
Toyota Group
Volkswagen Suzuki Group
2010 2020
Global Automotive Sales 2020 - Top 15 OEMs: Two Chinese & One Indian
manufacturer will secure place among Top 15 Global OEMs by 2020
Source: JD Power Forecasting; Frost & Sullivan Analysis
4.25%
4.27%
4.15%
3.61%
3.61%
3.70%
6.11%
4.62%
3.96%
5.73%
7.9%
6.11%
6.62%
4.67%
8.34%
Light Vehicle Sales of Top 15 OEMs (World), 2010-2020
Apart from leveraging the benefits of JVs with
VW & GM, SAIC focuses on building own bra
nd image in both passenger and commercial
segment.
3.3 Million expected sale of Suzuki Motors will
aid Volkswagen group to be Number One
OEM globally by 2020
Toyota will secure number two position speci
fically through improving market share in em
erging economies like China and India.
CAGR Million Units
Fiat & Chrysler's induvidual expertise built acr
oss three continents to support a one joint gro
wth
BMW’s vision to reach 2 Million mark is supp
orted by product portfolio expansion and impr
oving market share in countries like China & I
ndia.
94
Average vehicle production per platform is expected to more than double by
2020 from over 0.24 Million units in 2010
Tata followed by Daimler and Fiat-Chrysler groups are expected to share top honours for increased pr
oduction per platform in 2020.
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Platform Strategy: Average Vehicle Production Per Platform (World), 2010 and 2020
-
200
400
600
800
1,000
1,200
1,400
1,600
Vol
ksw
agen
Gro
up
Toyo
ta G
roup
Rena
ult-
Nis
san
Gro
up
Gen
eral
Mot
ors
Gro
up
Hyu
ndai
Gro
up
Ford
Gro
up
Fiat
-Chr
ysle
r Gro
up
PSA
Gro
up
Tata
Gro
up
BMW
Gro
up
Dai
mle
r G
roup
Gee
ly G
roup
Veh
icle
Pro
duct
ion
(‘000
)
2010 2020
95
Global Powertrain Mix by Fuels – Pure Electric propulsion to account for about 2
-3% by 2018 - Alternative fuels to account for about 9-11%
100-103 Million
2018
-
5
10
15
20
25
30
35
W.
Europe
NA Japan China Latin
America
India Russia Korea Middle
East
Million
s
Gasoline Diesel Alternative Fuels Electric
Powertrain Sales Mix (World), 2018 [PVs and LCVs]
Source: Frost & Sullivan
29-31%
18-20%
50-52%
1% 81-83%
4-6%
7-9%
5-7%
35-37%
46-48%
10-11%
6-8%
84-86%
3-4% 10%
2%
93-95%
4-6%
1%
45-47%
1%
45-47% 73-75%
57-59%
1%
7-8%
68-70%
18-20%
9-11 %
•Alternative Fuels includes LPG, CNG and high Biofuel compliant vehicles. Low Biofuel compliant engines [example <E25 and <B10] are included under conventional gasoline and Diesel. •Electric is pure electric propulsion only. Hybrids are included in the conventional Diesel and gasoline.
18-02%
2-3%
1.1%
8-10%
74-76%
1-2% 8-9%
16-17% 1-2%
27-29% 13-15%
96
Technology Snapshot by 2020: Legislation Driven Technologies like DPF+SCR, e-Call,
ESC and Tire Pressure Monitoring Systems are Expected to Have a High Penetration in EU
A – Technologies that have attained over 70% pene
tration rate in 20 years since introduction and
are driven by legislation
B – Technologies that have only reached 20-60% p
enetration rate in 20 years since introduction
C – Technologies that have reached less than 20%
penetration rate in 20 years since introduction
Penetration
_
+
Lane Departure Warning (LDW) 6 - 10%
Blind Spot Detection (BSD) 7 - 10%
Adaptive Cruise Control 8 - 10%
Semi-autonomous Parking Assistance 10 - 15%
EHB + Hybrid braking+ EMB /EWB 10 - 15%
Electric Motors & Li-ion Batteries (EV & Full hybrids) 10 - 15%
Seat - Ventilation (Driver/Passenger) 20.0%
B
C
Active Steering 15 - 20%
DVD 24%
Air Suspension 20 - 25%
Selective Catalytic Reduction 20 - 30%
Occupant Sensing Systems 30 - 35%
DCT + AMTs 25 - 30%
Advanced ESP 30 - 35%
Multi-functional Switches 36%
Turbocharger (% of gasoline) 35 - 40%
Embedded Navigation 40%
VVT (% of gasoline) 40 - 45%
In-vehicle Displays 48%
Passive Hands free 55%
GDI (% of gasoline) 30 - 35%
Whiplash Protection Systems 60 - 70%
Stolen Vehicle Tracking 75%
EPS -> CEPS + PEPS + REPS 80%
MP3/ WMA 90 - 95%
Standard ESP 100%
e-call 80 - 85%
Start –Stop Systems 85%
Tyre Pressure Monitoring System 100% 2020
So
urc
e:
Fro
st
& S
ulliv
an
A
2020 Vision of Global Automotive Industry: Penetration Rate of Key Automotive Technologies (Europe), 2020
97
Vehicle in Use 2020 – Car Park: 1.2 Billion personal vehicles on road – Huge
opportunity in Aftermarket
Note: Asia - China, India, Indonesia, Japan, Korea, Malaysia, Philippines, Taiwan, Thailand, New Zealand
Eastern Europe – Bulgaria, Bosnia, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine
North America - Canada, Mexico, USA
South America - Argentina, Brazil,
Western Europe - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK
Note: Vehicle Parc in Million Units Note: All figures are rounded; the base year is 2010 Source : JD Powers / Frost & Sullivan
896 Million VIO 2010
2020 Vision of Global Automotive Industry : World Personal Vehicle PARC units by 2020 (In Million Units)
Canada 2.3
North America South America Western Europe Eastern Europe Asia Other
Other 37.2
India 66.1
Japan 65.14
Australia 15.3
China 202
Russia 50.14
Others 121.25
Turkey 11.8 Poland 19.2
USA
274.6
Mexico 34
Canada 23
NA
32.1%
Brazil 26.8
Argentina 7
Others 48.14
France 34.2
Germany 48.16
Italy 38.9
Spain 24.12
UK 34.58
Western
Europe
23.1%
Eastern Europe
10.2%
SA 3%
Asia
19.4%
Others
12.2%
NA
26.7%
SA 2.7%
Western
Europe
18.4%
Eastern Europe
9.5%
Asia
31%
Others
11.7% Other 51.09
South Africa 8
1.2 Billion VIO 2020
PAGE 98 THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED
Around the world, around the table
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THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED
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