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Body Level Five Dr Patrick Dixon Chairman Global Change Ltd

Fellow, Centre for Management Development London Business School

TheFutureofAlmostEverythingImpactofglobaltrendsonautoindustryandindustrialcoa;ngs

Trends Impact

Other Trends

Why impact of disruptive events will often be more limited than many predict

Future Reality Check - biggest driver isEmerging markets impact on rest worldLarger and smaller scale manufacturing

Impact of green tech and new fuelsFuture of auto industry, design, ownership4 word phrase - basis of all future success

Core Message

Long term trends in key areas will create huge growth, despite

great feelings of uncertainty. Rapid innovation will be needed to stay ahead and meet demand

Ins;tu;onalBlindness

Complexity and scale create risks

and new opportunities

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Agility

Yet many trends changing more slowly

than people think

REALITY CHECK

Cash growing - bank branches continue -

music, fashions, food, leisure, homes similar, robots, 3D printing etc

Robots in Factories only 7% pa 92,000-170,000 2000-2012

3D scans - 3D printing

Global Economy

WGP(%,constantprices)

VietnamGDP1985-2011

$3.4trillion($50trillionby2020globally)

>>$2.4trillion

Reserves

One word will dominate ALL

FUTURE

The future is about EMOTION

EmergingMarkets

85% of world population will be living in emerging

markets in 10 years

1% owns 50%

1 billion will move to cities in 30 years

People love Cities and Offices

Numberofvehiclesper100people

Global car sales 107m by 2020

up from 87m in 2016

Europe / Japan - flatAmerica - recovered

China - 19m to 31m in 7 years

4LmesasmanycarsonearthifwholeworldhassameownershipasAmerica

Europe ageing impact 4 couples to produce single great-grand child

1 million over 90 year olds in Italy in 12 years time

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LARGER SCALE

InmanyEUnaLons,>70%ofretailspendin

VW mega platformVWMegaPlaVorm-basisfor1mcars

World too small for more than:2 airline manufacturers

3 mobile operating systems10 large pharma

5 large auto companies

With rapid growth of niche manufacturing

Growing scale in

chemicals industry

8%wageinflaLoninChina-partoffsetbycurrencyfall

SMALLER LOCAL

SUPPLIERS

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Shorter global supply chains

Since 1980, global trade has grown at twice the rate of production but now growing LESS than production

NearshoringBoom

$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism

120,000 terawatts of sunlight /day 7,000 times total global power use Power Moscow from Libyan Desert

Why China will dominate wind power industry 40% EU power = wind by 2050

Surplus wind to hydrogen - to methane ?

75% global growth in green energy was in China in 2014

EnergyusehashalvedperunitofproducLoninEUchemicalindustry

overlast20years

Shale gas oversupply so US petrochemical boom

$135bn will be invested soon in 215 new plants

MakingethyleneinEUcoststwiceasmuch

asinAmerica

Emerging markets see US /EU petrochemicals as expensive, too pure

Expect 70-80% active product for 50% price

>30%energysavingswithgreentech

Lighter vehicles New Range Rovers are 40% lighter

PlasticsCarbon fibre

Less steel

NanotechCoaLngs

Auto Fuel of the Future ?

30 million acres lost

EU 5% gasoline and diesel from food

25% of 2010 US grain fuel

Hydrogen

GimmickorReality

Problemswithsupply,storage,milesperkgofgas

FutureofHybridCars

Whypayfortwoengines?

GMVolt

Averagedriverusesba_ery82%ofLme

Meeting full capacity of Tesla new factory will require entire global output of lithium batteries

Electric car sales off-target

Germany: 1 million by 2020Nissan Leaf: selling 20,000 a year, but

factory capacity for 150,000 a year

> Solar Paint

7 square metres per kilowatt

FUTURE AUTO

DESIGN

Auto ParkingFord, Audi, Volvo, Honda

Drowsy, Drunk, DistractedAlcohol in sweat on gear leaver / erratic driving Nissan

LED detection of closed eyes University of LeicesterHead not facing road Audi

Detection heart problem (ECG from steering wheel) Nippon Medical School

Boominconnectedcarsales

GM 4G

AllnewGMcarsinUS/Canadawith4G

Vehicletrainssave30%offuel

legalliabilityinaccidents?

Expectnewpa_ernsofcarownership

Milesdrivenby20-30yearoldsdown8%in20yearsacrossAmerica(30%downin10yearsinUK)

113

Rentbyhour-instantly

Who owns the driver ? Manufacturers - telcos - breakdown

companies - dealer network - independent garages - leasing

company - software provider - insurer

Why impact of disruptive events will often be more limited than many predictReality Check for every business

The most important driver of the futureHow Digital will change what we are

Emerging markets impact on rest worldFuture of auto industry and manufacturing4 word phrase - basis of all future success

LessonfromNon-ProfitsandAcLvists

Connectwithallthepassionspeoplehaveandtheywillfollowyoutotheendsoftheearth,promotewhatyoudowithpride,

investinyourbusinessesandmayevenbewillingtoworkforyoufornexttonothing

.andthefourwordphraseis.

BuildingaBe_erWorld

Core Message

Long term trends in key areas will create huge growth, despite

great feelings of uncertainty. Rapid innovation will be needed to stay ahead and meet demand

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Dr Patrick Dixon Chairman Global Change Ltd

globalchange.com@patrickdixon

Brain Dump

Write down whatever is in your mind - trends - opportunities - challenges - issues - impact

Share with Neighbour

Write down whatever is in your mind - trends - opportunities - challenges - issues - impact

Share with Neighbour

One key insight / compelling thought

Share with Neighbour

One key insight / compelling thought

Build your table perspective

Table share with Room

Capture key insights onto wall Each person votes to create

HEAT MAP

HEAT MAP

Patterns - Key Insights

Reflections

Questions / Answers

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Dr Patrick Dixon Chairman Global Change Ltd

globalchange.com@patrickdixon