the steel consumption in the automotive industry in europe 2 nd metal expert europe steel trade...
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The Steel Consumption in the Automotive Industry in Europe
2nd Metal Expert Europe Steel Trade Conference
Peter FußSenior Advisory Partner AutomotiveApril 28, 2014
Page 2 Steel Consumption in the Automotive Industry in Europe
The state and outlook for the auto industry
Page 3 Steel Consumption in the Automotive Industry in Europe
-5% 0% 5% 10% 15% 20%
-10%
-5%
0%
5%
10%
15%
20%
Markets offering growth over the next few years*:► US: growth anticipated in the near term; SUVs and pickup trucks outpacing the overall market
growth► Brazil, China and India: short-term slowdown in growth (restrictions on car sales in China and
return of IPI tax in Brazil in 2014); however, medium-term growth story still intact; SUVs (especially in the interior regions and lower tier cities) to witness uptake in China
► Russia: Considerable sales decline, nevertheless, SUVs, both economical and premium models, witnessing considerable growth ; rising middle class and low car density to drive growth in the long term
LV sales growth in major markets
Source: LMC Automotive (4Q13, 4Q10)
Within Europe, Eastern Europe LV sales expected to recover and grow faster than Western Europe, while Global LV sales growth is estimated to be driven by BRICS market
Note: Size of the bubble indicates LV sales during 2013, sales in million units have also been mentioned in parenthesis after the name of country
CA
GR
20
13
-17
fCAGR 2009-13
Eastern Europe (1.9)
Western Europe (12.8)
Japan (5.2)
North America (18.4)
China (21.3)
India (2.9)
Brazil (3.6) Russia
(2.8)
*Period under consideration for the growth forecast: 2013-17
Page 4 Steel Consumption in the Automotive Industry in Europe
0% 5% 10% 15% 20% 25% 30% 35%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
LV production growth in major markets
Over the next few years, Europe is estimated to witness higher production growth than in 2009-13
Markets offering growth over the next few years*:► Brazil, Russia: For Brazil, production of SUVs and A segment (Basic) cars, while for Russia
production of Pick-up and C segment (Compact) cars to witness highest growth ► China, India: production of SUVs and large-plus cars to witness highest growth ► North America: production of G segment (sports) cars and vans to grow at a CAGR of 137% and
17%, respectively
*Period under consideration for the growth forecast: 2013-17
Note: Size of the bubble indicates LV production during 2013, production in million units have also been mentioned in parenthesis after the name of country
CA
GR
20
13
-17
f
CAGR 2009-13
Eastern Europe (4.4)
Western Europe (12.4)
Japan (9.1)
North America (16.2)
China (20.5)
India (3.6)
Brazil (3.5)
Russia (2.1)
Source: LMC Automotive (4Q13, 4Q10)
Page 5 Steel Consumption in the Automotive Industry in Europe
The auto industry’s weight agenda
vehicle weight
fuel economy
If car weight 2009 = 2011
CO2 emissions would have been 4 g/km lower
6%-8%10%
2020
2013
Plastics
of volume50% of weight10-12%
Page 7 Steel Consumption in the Automotive Industry in Europe
Owing to growing concerns of environmental stability, stringent emission norms are being implemented; industry participants look to re-invent product and manufacturing to meet the targets
80
120
160
200
EU China Japan US
2010 2015F 2020F
Industry participants consider several alternatives to achieve targets
Source: International Council for Clean Transportation
Alternate powertrain
Light-weighting
Vehicle design improvements
Efficient engine and power transmission
Oil
Historic emission levels and future targets (in gCO2/km) for key markets
Page 8 Steel Consumption in the Automotive Industry in Europe
Added safety and comfort equipment led to the rise in weight of vehicles till 2011; with an aim to achieve emission targets, industry participants adopt light weighting measures
2004 2005 2006 2007 2008 2009 2010 2011 2012F 2016F 2020F1,000
1,100
1,200
1,300
1,400
After reaching a peak in 2011, OEM’s, suppliers and material suppliers have begun focusing energies on inverting the “weight spiral”
Source: European Aluminium Association, TRW and EY analysis
Evolution of average mass of new car registrations in Europe (kg)
Page 9 Steel Consumption in the Automotive Industry in Europe
Explore usage of light-weight alternate materials to meet stringent emission norms
AluminiumHigh-strength
steel
Plastic compos-ites**
Magnesium
Traditional steel
Reduction in weight
Ris
e in
cost
Comparison of traditional steel with alternate materials
*AHSS: Advanced High-strength steel; **Plastic composites include Fiber Reinforced Plastics, Thermoplastic etc.
21%
13%
1%
11%
52%
2%
AHSS* Aluminium
Magnesium Plastics
Traditional steel Others
7%
10%
9%
72%
2017F
2010
EU: Automotive materials breakdown based on volumes (2010, 2017F)
Source: Frost & Sullivan, ICIS Source: US Department of Energy
Page 10 Steel Consumption in the Automotive Industry in Europe
Plastic composites offer a significant opportunity for weight loss in new vehicle development
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Today Tomorrow
-40% vs. steel
Long term weight reduction potentialEngineering plastic demand in automotive
2011 2020F0
0.5
1
1.5
2
2.5
1.3
2.2
In m
illion t
ons CAGR: 6%
Source: BASF, BCG and EY analysis
Weig
ht
-50to75% vs. steel
Page 11 Steel Consumption in the Automotive Industry in Europe
Industry participants come together and adopt myriad of light weighting strategies…
Efficient manufacturing processes
Module downsizing
Use of low-density, high-strength materials
Vehicle manufacture
rs
Component suppliers
Material suppliers
Light-weighting strategies
Page 12 Steel Consumption in the Automotive Industry in Europe
Many thanks for your attention !
Phone +49 6196 996 27412 Mobile +49 160 939 27412Fax +49 181 3943 27412Email [email protected]
Peter FußSenior Advisory Partner Automotive GSA
Ernst & Young GmbHWirtschaftsprüfungsgesellschaft Mergenthalerallee 3 – 565760 EschbornGermany
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