Upload
vuongcong
View
219
Download
3
Embed Size (px)
Citation preview
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved.
CAR Management Briefing Seminars
The Quandary of Two Automotive Markets:Today and TomorrowJeff Schuster, LMC Automotive
August 2017
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 2
• Today – Navigating the Here and Now with Mid-term Prospective
• Tomorrow – Planning for Uncharted Future Mobility
• Summary – Finding Balance
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 3
Global Light Vehicle Climate
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 4
3%
9%
1%
2%5%
2%
2017 forecast up 2.0mn units to 95.0 mn, with all major regions showing positive growth except North America. Outlook momentum since January is mixed bag!
6%
2%
-2%
9%6%
3%
-13%
-0.4%
5%
-21%
-12%
10%
North AmericaChina
C&E EuropeWestern Europe
South America
15 16 17F
World
15 16 17F
15 16 17F
15 16 17F
15 16 17F15 16 17F
Global LV Sales Poised for 8th Year of Growth
Source: LMC Automotive
-1%
2%5%
Asia Pacific minus China
15 16 17F
= Revision Momentum Since January
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 5
37%-6%
16%-3%
1%-3%
2%5%5%
7%1%
7%
China
USA
India
Japan
Germany
UK
France
Italy
Brazil
Russia
Canada
Iran
Contribution of Growth 16-20
93.195.0
96.699.0
101.6
88
92
96
100
104
2016 2017 2018 2019 2020
Global LV Sales
• Short-term outlook remains positive through horizon – Volume up 6% or 2.1% CAGR.
• Growth expected to slow slightly in 2018 (1.7%).• Tax break easing in China.• Past peak in US?• Brexit/political risk in Europe.
• Growth returns to 2.6% in 2019.
• Rate of growth is heavily dependent on China demand (3.1mn units).
• 3 of top 12 countries are negative .contributors, with marked risk across others
• India, Russia and Iran add 2.5mn of volume growth collectively.
Global LV Sales Short-term Outlook
Source: LMC Automotive
+8.5mn
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 6
Locally made PV sales growth saw a strong rebound stimulated by tax cut incentives in 2016. Pull ahead impact and reduced incentive caused weaker H1.
3%
22%
12%12%
23%
13%
17%
25%
14%15%
10%13%12%
3%0%
20%
9%
15%
31%
18%
6%5%
0%
5%
10%
15%
20%
25%
30%
35%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
In m
illio
ns
Sales Volumes Sales YoY Growth
CHINA PASSENGER VEHICLE SALES (CAAM WHOLESALES)
Source: LMC Automotive
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 7
China Car Market Outlook
Source: LMC Automotive
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 8
88.7
92.995.1
1.32 0.45 0.32 0.17 0.06 -0.10
87
89
91
93
95
97
Global LV Production – Contribution to Growth
Source: LMC Automotive
• Volume growth spiked in 2H16, with year up 4.7% on strong growth in China due to boost in demand from tax cut –further recovery expected in Russia/Brazil. 2017 growth still slows to 2.4% on some weakness in NA.
• ROW driven by growth in Iran (21%) and Morocco (17%). Production In Iran could face risks.
• Growth slows in WE with volume up marginally, while Central and Eastern Europe sees growth restarting, including recovery in Russia (+9%). Brazil also expected to start recovery in 2017, up 8%, but remains risky. Contraction now expected in NA.
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 9
94%83%86% 84%86% 90%82% 81%
63% 66%79% 80%61% 70%
38% 45%
2016 2021US Mexico Korea Japan China WE EE SA
69.6% 72.2%
2016 2021
Global
_ _
Capacity utilization improves overall but with previous investment in emerging markets, it is sub-optimal.
Capacity Utilization Mixed Across World
Source: LMC Automotive
• Growth in demand slows – if any investment in US, closures likely to result elsewhere.• China remains well underutilized with old factories remaining after newer capacity push.• Reduction in Japan/Korea improves utilization; much of SA investment to remain unused!
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 10
Source: LMC Automotive
SUVs to Gain More Ground in all MarketsSUV market share (of LVs), major markets
129 207 222 351 500+Number of SUV models in
production globally
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 11
10 Million UnitsLight Vehicle Production
Global volume leadership very close in 2017 between VW, Toyota and R-N: VW Group most likely to come out on top, but R-N (incl. Mitsubishi) has 1H lead!
Source: LMC Automotive
Ranking the Giants
0
˃
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 12
North America Prospective
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 13
FICO Sub-650 Mix
14.8%-1.6ppts
72mo + Loan Mix
34.3%+1.9ppts
Incentive % of MSRP
10.3%+0.9ppts
Lease Maturities
1,707k+14%
Trans Price
$31,388+1.3%
Days to Turn
69+4 days
Lease Mix
30.4%-1.0ppts
RetailMix
79.5%+1.3ppts
YTD17 Vs. YTD16 – Indicators showing risk, but slowly improvingTotal Light Vehicle Volume -2.3%, Retail Sales Volume -0.6%
How Healthy is the Auto Industry?
Source: JDP PIN
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 14
Annual Industry Sales1H Industry Sales
8.15 8.51 8.64 8.44 16.49 17.45 17.54 17.15
5.0% 4.5% 1.5% -2.3%
5.8% 3.2% -0.6% -0.6%
5.9% 5.8% 0.5% -3.0%
5.6% 5.1% -0.8% -2.2%
• 1H17 SAAR Average 16.9mn down from 17.2mn last year – 2H17 expected at 17.1mn from 17.8mn.
• Fleet sales off 6.2% in 1H and volume expected down 4.7% in 2H ending at 18.7% of industry from 19.4% in 2016.
• Retail sales only down 0.6% in 1H but will face pressure from 2H strength in 2016, expect decline of - 3.6% in 2H17 on one less selling day.
US Auto Industry Performance
Source: LMC Automotive, JDP PIN
Total
Retail
1H = Fleet Pullback
2H = Both in Decline
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 15
Finding the Production Balance
Source: LMC Automotive
123
7376
0
50
100
150
2016 2017
We
eks
(Ju
ly)
Changeover/Upgrades Supply/Upgrades
7499
0
10
20
30
40
50
60
August September October November December
Changeover Down Weeks Supply Down Weeks
Inventory remains on watch as Days’ Supply is up 8 days over 2016, with 400k more unsold vehicles. Risk in H2 with additional down weeks possible. Additional shutdown risk greatest in Q4 as expectations may meet reality!
150 Down Weeks from August – December
17.8
17.7
2016 2017
Summer Plant Shutdowns Increase, But…
-0.6%NAProduction
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 16
17.4 17.5 17.0 17.0 16.9 17.0 17.2
• Fragmentation and competition increases going forward – SUVs, HEV/EVs are a priority.
• 123 new entries from 2017 forward, with 183 redesigns planned.
• Model Count increases from 360 in 2016 to over 400 by 2020!
US - Flat to Falling!
US Product Activity Remains High
Source: LMC Automotive
2015 2016 2017 2018 2019 2020 2021
New Entry 18 25 23 25 39 25 11
Redesign 23 20 29 37 46 36 35
Facelift 36 38 39 32 36 55 53
Drop 7 17 38 5 6 8 4
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 17
% Mix of #Entries in Market
US Product Mix Following Demand…
Source: LMC Automotive
38% 38% 38% 36% 35% 34% 34%
5% 4% 4% 5% 5% 5% 5%
18% 18% 17% 17% 16% 16% 16%
31% 31% 33% 36% 38% 40% 40%
2015 2016 2017 2018 2019 2020 2021
Car MPV Pickup Sporty SUV Van
SUV market share up 10ppt from 37% in 2015 to 47% in 2021; product activity skewed on premium side.
Market share of cars down 11ppt from 39% in 2015 to 28% in 2021 as # of entrants fall.
Pickups gain 2ppt of share from 2015 capturing 16% of market in 2021.
10ppt
11ppt
2ppt
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 18
17.5 17.0
16.917.2
17.5
15.4
17.0
17.318.0
14
15
16
17
18
19
20
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
Baseline – Flat post peak• CAGR ‘16-24 of 0% (flat). • + and – variable offset .• + = economy, replacement,
new households.• - = used car prices, tighter
credit, trade/fiscal policy uncertainty.
Source: LMC Automotive
US Light Vehicle Demand at Crossroads
Negative – Mild auto recession• Volume drops 8% from base to
15.4mn in 2019 – CAGR -0.4%. • No fiscal stimulus boost and
negative trade policy .• Used car interplay more severe,
economy flat or slightly negative. • Recovery hampered by lower
density growth.
Outperform – Two-staged boost• CAGR only 0.3%.• Near-term boost from fiscal
stimulus and lease maturities.• Stronger than expected
economic growth. • Technology driven increase in
mid-term as market transitions.
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 19
Source: LMC Automotive
• The demand shift toward SUVs drives rapid change in wave 2 of SUVs. SUV output in Mexico grows by over 200% (mostly Small and Compact), while US build gains 13% w/Midsize leading growth.
• Car production drops on slowing demand, resourcing outside NA and likely cancellations. US output hit hardest (-23% expected) leaving some Car-centric plants at risk. Mexico gains 12% with new plant resourcing and exports.
• Pickup build is stable, aided by new Midsize entries and consistent Large Pickup demand.
NA Production’s Pronounced Bodystyle Shift!
17.0 17.7 18.1 18.7
7.0 6.2 5.7 5.6
6.1 7.1 7.9 8.5
2.8 3.4 3.5 3.61.0 1.1 1.0 1.0
0.0
5.0
10.0
15.0
20.0
2014 2017 2020 2024
Mill
ion
s
Car SUV Pickup Van/MPV
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 20
Source: LMC Automotive
Detroit 3 NA Plants – Are There Too Many?
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 21
• Today – Navigating the Here and Now with Mid-term Prospective
• Tomorrow – Planning for Uncharted Future Mobility
• Summary – Finding Balance
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 22
Will Disruptors Engaged in Disruption be Disrupted
by…Reality?
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 23
World of Mobility is Coming, but When?
Shared
Electrification
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 24
Japan Example - Cars in use per 000 adults
Ownership Growing on the Traditional Model
But what happens if ownership patterns change because of
new mobility solutions?
Source: LMC Automotive
66.393.1
111.7
2008 2016 2024
Global LV Demand
LV Sales CAGRLast 15 Yrs. – 3.4%2016-2024 – 2.3%
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 25
Source: LMC Automotive; LMC International
Light Vehicle Fleet Soon to Hit 1.5 Billion
• New mobility trends do not come quickly enough to change growth dynamic.
• With sales approaching 100mn units/year, a rising parc is inevitable –scrappage rising from ~50mn units/year now to 60mn units/year.
• Growth focused in emerging markets, with fleet levels growing very slowly, if at all, in mature markets.
• Aftermarket opportunity expands, but adds complexity for introduction of sharing alternatives and autonomous vehicles later on.
Global Light Vehicle parc, billions
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 26
Preparing For The Future – Premiums Lead The Way
Source: LMC Automotive
Electrifying SUVs
1% 2% 2%5%
8%12%
14%18%
15%
21%
35%
48%
58%63%
0%
10%
20%
30%
40%
50%
60%
70%
2015 2016 2017 2018 2019 2020 2021
EV % of SUV Sales
% of SUVs with EV P/T
2015 2016 2017 2018 2019 2020 2021
Premium 56% 56% 63% 60% 54% 54% 52%
Traditional 44% 44% 38% 40% 46% 46% 48%
Premium brands continue to offer more EV SUVs than traditional brands
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 27
Connected Vehicles in Various Modes
Source: LMC Automotive
Issues:• Today’s Environment – System implementation
have significant lead time – New V2V likely start.• Lack of Standards – Agreement on standards
internationally is critical for widespread adoption, and for successful implementation.
• Mobile Network – Lack of completeness in mobile network coverage is an issue.
• Security and Privacy – Remains a significant threat to acceptance.
Connectivity is a critical enabler for improved shared services and, ultimately, for Avs.
Vehicles will increasingly communicate with surroundings: Other vehicles Infrastructure Other road users (cyclist, pedestrian) Internet
Leading to New Services:• Safety• Infotainment• Traffic Management• Vehicle Diagnostics
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 28
Mobility Services Are Not New
Source: LMC Automotive
• Deeply integrated shared forms of transportation have been around for decades and are used by vast numbers of people on a regular basis.
• New mobility solutions now compete, while some may integrate further.
• Increased connectivity of vehicles within new mobility (shared) offerings may increase the effectiveness of their connection to consumers.
• App-based ordering and booking also increases ease of use.
• But the change is not really transformative: it appears to be additive in terms of choice and capacity.
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 29
Shared Models Continue to Advance but …
• Various models now operating across the world with heavy focus on densely populated areas.
• Include: ride hailing, ride sharing, car pooling and car sharing.
• Economics of ownership model still wins for almost all users, in most circumstances, and even in cities.
• Current (and near future) shared models mainly offers more choice for consumers and competes with ‘old’ shared models (taxi and public transport).
• The real disruption would be when future automation converges with sharing.
Source: LMC Automotive
… are not proving a major threat to volume
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 30
But Will They Survive?
Example: Uber’s situation
• Huge and fast-growing revenue – over $9bn in the last four quarters.
• But market domination is proving difficult (e.g. Lyft).
• And enormous losses, at over $3bn in 2016.
• Large cash, and other, reserves (>$9bn) but this won’t last unless the losses can be eliminated.
• General statement: increased size should bring increased scale economies.
• But as Uber grows, its costs grow almost as quickly as the highest proportion of cost is paying drivers (who already complain of lower rates and more difficult working conditions than traditional taxi drivers).
• Other scale advantages should be evident, but will they ever be enough?
• Unless something changes, there is significant risk. Will the largest start-up become a huge financial failure?
Source: LMC Automotive
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 31
Full Autonomy Wheel of Challenge
Full Autonomy
3D Mapping Road users,
other events
Morality & decisions
Sensors
Bad Weather
Acceptance (Safety)
Peak Hours Demand
Expectations Met
Driver Intervention
Cost/ PriceCommercial
Success
Cyber Security
AI
Industry Standards
Legacy Vehicles
Legacy Infrastructure
Connectivity: V2X, Networks
Privacy
Legal Issues & Liability
Insurance
Source: LMC Automotive
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 32
AVs: Advanced Timeline & Impact Consideration
2020-25 2025-30 2030-35
• Mass trials Level 4 vehicles.• AVs have not “arrived” at
this point. This is still a part. of establishing how they work on a large scale.
• Numbers cannot be huge because of potentially huge expense.
• Impact: zero conventional + some new AVs
Source: LMC Automotive
• Next stage in development of AVs including learnings from phase I.
• True commercial implementations develop.
• But geographical extension still limited.
• Level 5 vehicles starting.
• Impact: minus few mn conventional + new AV sales
• AV sales globally in 5-10 mn range and rising.
• Substitution starts to hit individual (conventional) ownership model.
• Level 5 vehicles arrived, replacing some Level 4.
• Impact: minus several 10s mn conventional + new AV sales.
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 33
Moderate Progress
- Success in limited areas- Incremental expansion- Breakthrough emerges in 2030s- Conventional flattens, ready for
subsequent fall
Transformative
- Technological, commercial, logistical issues solved fairly quickly
- Breakout from first zones to much broader usage
- Transportation boom
Global Light Vehicle Sales (mn)Level-5: 1.3 mnLevel-4: 4.2 mn
Slow Burn
- Technical difficulties- High costs- Infrastructure delays- Consumer reluctance
Conventional (AV3 or less) owned-model vehicle sales – many with some, but not full, autonomy
Source: LMC Automotive
Level-5: 7 mnLevel-4: 6 mn
Level-5: 25 mnLevel-4: 12 mn
Scenarios to Autonomous Vehicles
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 34
• Today – Navigating the Here and Now with Mid-term Prospective
• Tomorrow – Planning for Uncharted Future Mobility
• Summary – Finding Balance
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 35
Summary
Political risk remains across WE (Brexit) and BrazilPayback from tax incentive expiration in China.
Upside/downside from Trump administrationUsed car impact is more severe.
Downtime is already scheduled but could be more pronounced if OEMs don’t balance incentive use.
New plant investment is curtailed based on policyUncertainty around NAFTA decision.
Volume increase causes price drop; existing convenience barriers are innovated away.
Rapid adoption destroys conventional demand more quickly, brings future forward.
Expectation Risk
Global demand growth is stable with most markets advancing – mature and emerging (Russia/Brazil).
US demand revised downward but above 17mn –weaker but stable outlook in near-term.
Short-term production in NA now expected to contract with some further inventory risk in H2.
North America production volume continues to grow with localization pushing toward 19mn units.
Shared economy only destroys a small amount of demand – a fraction of one year’s growth in years.
Automation will create massive change in auto industry, but unlikely to collapse total volume.
Nea
rFa
r
Source: LMC Automotive
Thank YouThank You
www.lmc-auto.com© 2017 LMC Automotive Limited, All Rights Reserved. 36