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Autofacts ®
Inside China Conference: China‟s Automotive Future
PwC 2
Global Overview – Light Vehicle Outlook By the numbers
Source: Autofacts 2011 Q4 Data Release
104 million:
The number of light vehicles that
will likely be produced in 2017
5.5%:
The CAGR for global light
vehicle assembly between 2010 -
2017
83%:
Emerging markets‟
contribution to growth between
2010 - 2017
3 PwC
45 43 44 44 44 44 44 44 40 30
36 38 40 41 42 42 42 43
11 11 12 14 16 19 21 25 26
27
35 38
44 49
54 57 60 61
0
10
20
30
40
50
60
70
80
90
100
110
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
Emerging Mature
Assembly Outlook – Global Emerging markets in the driver's seat
Global: Light Vehicle Assembly by Market Type 2000 – 2017 (millions)
Source: Autofacts 2011 Q4 Data Release
4 PwC
Assembly Outlook – Global Much ado about something . . . in Asia
Global: Contribution to Growth by Region 2000 – 2017 (percentage)
Source: Autofacts 2011 Q4 Data Release
0% 10% 20% 30% 40% 50% 60%
MEA
EE
SA
EU
NA
AP China 38.5% India 12%
Brazil 6.4%
Russia 6.2%
PwC
Already the largest automotive market in the world, China is poised to eclipse the 20 million mark in 2013.
Understanding the underlying dynamics of this market is critical to participating in China‟s growth story.
From providing much needed growth opportunities to spawning alternative technologies, China will play a pivotal role in the evolution of the auto industry.
5
Domestic Demand
Government‟s Role
Emerging Domestics
Alternative Technologies
Export Ambitions
Market Overview – China Understanding China
6 PwC
0
100
200
300
400
500
600
700
800
900
Vehicles/1000 People Vehicles/Mile of Road Vehicles/Sq Mile
USA UK Germany China
Sales Outlook – China Will China achieve Western standards of living?
Source: Wards Auto
US, UK, Germany, China: Light Vehicle Penetration 2010 (number of vehicles)
China’s vehicle PARC would have to grow
by more than 650 million to achieve
penetration levels of the Western World
7 PwC
0
50
100
150
200
250
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013F
2015F
Japan Korea China
Sales Outlook – China China is just firing up all its cylinders
Source: Autofacts Analysis
Japan, Korea and China PV Penetration Comparison
1955 – 2015 (Units/1000people)
Japan Korea China
Take-off Years 1962 - 1972 1989 - 1997 2007 - 2015
GDP per Capita (PPP)
Growth 8.9% 9.0% 10.4%
Median Age 26 - 29 27 - 29 33 - 36
8 PwC
2009
Stimulus
Plan
Sales Forecast
0%
10%
20%
30%
40%
50%
60%
0
4
8
12
16
20
24
28
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Sales Annual Growth Rate (R-Axis)
Sales Outlook – China Sales will grow rapidly, but unlikely at 2009/2010 levels
Source: Autofacts 2011 Q4 Data Release
China: Light Vehicle Sales 2000 – 2017 (millions)
9 PwC
Economic Outlook – China 2015 focus lies on economic optimization & sustainability
Source: Statistical Yearbook 2010, MIIT, MOST
China: GDP Growth 1981 – 2016 (RMB trillions)
-
10
20
30
40
50
60
1981 1986 1991 1996 2001 2006 2011 2016
GD
P
12th FYP 11th FYP 10th FYP 9th FYP 8th FYP 7th FYP 6th FYP
Export &
low wages
Domestic demand &
services
Optimization &
sustainability
Reforming &
opening
Growth
focus
Maritime regions and
eastern provinces
Western and central China /
rural regions
Megacities and maritime regions
(Shanghai, Tianjin, Beijing )
7-8% (f) 16.9% 13.3% 10.4% 26.8% 15.8% 14.9%
Note: Nominal GDP at current prices
10 PwC
Sales Outlook – Inland China Catering to a new set of consumers
Source: National statistic bureau, Autofacts Analysis
70+ 51 – 70 31-50 0-30
Beijing
Tianjin
Shanghai
Xinjiang
Tibet
Qinghai
Gansu
Sichuan
Yunan
Guizhou
Guangxi Guangdong
Fujian
Zhejiang
Shandong
Heilongjiang
Inner
Mongolia
Jilin
Liaoning
Ningxia
Shaanxi
Shanxi
Hubei
Henan
Anhui
Hunan Jiangxi
Jiangsu
Hong Kong
Hainan
Chongqing
Hebei
Beijing
Tianjin
Shanghai
Xinjiang
Tibet
Qinghai
Gansu
Sichuan
Yunan
Guizhou
Guangxi Guangdong
Fujian
Zhejiang
Shandong
Heilongjiang
Inner
Mongolia
Jilin
Liaoning
Ningxia
Shaanxi
Shanxi
Hubei
Henan
Anhui
Hunan Jiangxi
Jiangsu
Hong Kong
Hainan
Chongqing
Hebei
Taiwan
2010 FAI YoY Growth less than country average
2010 FAI YoY Growth more than country average
China: Vehicle Density by Province 2009 (cars per thousand people)
China: Fixed Asset Investment by Province 2010
Passenger Vehicle Density (cars/1000 ppl)
11 PwC
Sales Outlook – China’s Smaller Cities Catering to a new set of consumers
0
10
20
30
40
50
60
70
80
90
100
2000 2002 2004 2006 2008 2010(f) 2012(f) Tier 1 City Tier 2 City Tier 3 City
Source: Autofacts 2011 Q4 Data Release
China: Household Disposable Income by City Tier 1995 – 2012(f) (RMB thousands)
14.1
26.6
0.9
5.2
7.8
12
16
20
24
28
2010 Tier 1 Tier 2 Tier 3 2017
China: Sales by City Tier 2010 – 2017 (millions)
RMB38,000 for a basic model
Tier 3 cities gain affordability
as Tier 1 cities in 2010
Tier 2 cities gain affordability
as Tier 1 cities in 2008
12 PwC
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
3
6
9
12
15
18
21
24
27
30
33
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
Assembly Volume Excess Capacity Utilisation (R-Axis)
Assembly Outlook – China Assembly growth overtaking capacity additions
Source: Autofacts 2011 Q4 Data Release
China: Light Vehicle Assembly Outlook 2000 – 2017 (millions)
13 PwC
Assembly Outlook– China Western vs. Chinese view of the market
Source: Autofacts 2011 Q4 Data Release
China: Current Alliance Group Assembly Outlook* 2000 – 2017 (millions)
0 1 2 3 4
Others
Dong Feng
FAW
BYD
Great Wall
PSA
Ford
Honda
Chery
Geely
R-N
Toyota
Chang'an
Hyundai
VW
GM
2017 2010
* R-N = Renault-Nissan
China: Current Automaker Assembly Outlook 2000 – 2017 (millions)
0 1 2 3 4
Others
Southeast
Jiangling
Zoyte
Jianghuai
Brilliance
BYD
Great Wall
Geely
Chery
BAIC
GAIC
Chang'an
FAW
Dongfeng
SAIC
2017 2010
5.0
14 PwC
267
402
204 203
108 115
64 78
116
145
67 52 51 48
28 28
-
50
100
150
200
250
300
350
400
450
2010 2015 2010 2015 2010 2015 2010 2015
China Japan USA Germany
Nameplate Platform
Assembly Outlook– China Fragmentation limits China’s potential
Source: Autofacts 2011 Q4 Data Release
China: Number of produced series and platforms in selected countries* 2000 vs. 2015 (quantity)
Note*: Series reflect the „base model‟ - without division by variant, like sedan or wagon
5.0
15 PwC
Assembly Outlook – China Consolidation: China’s plan for a new industry structure
Source: MIIT, MOST, NDRC, CAAM, PwC Autofacts (Q2/2011)
Chinese Foreign
Number of
OEMs* >50 14
Average
utilization 80% 95%
Market share ~40% ~60%
Export share
~3.9%
Global Player none many
Chinese Foreign
Number of
OEMs* 5-8 n/a
Average
utilization ~100% ~100%
Market share >50% <50%
Export share >10%
Global Player some n/a
Note: *With local production in China
China: Current Industry Structure 2010
China: Ideal Industry Structure 2015
16 PwC
Industry Outlook – China China’s perspective on new propulsion technology
Source: Manufacturer Websites
China: Overtaking Without Catching Up
Fossil “Post-fossil”
Hybrids (HEV)
Plug-in Hybrids (PHEV)
Battery EV (BEV)
Fuel Cell EV (FCEV)
ICE
New Energy Vehicle
17 PwC
Industry Outlook – China China’s new energy vehicle policies
Source: Press releases and documents of MOST, MIIT
China: Significant programs and regulations to develop the New Energy Vehicles
“863”-Plan – Project for EVs
Ministry of Science and Technology (MOST):
• Goals for 2015 concerning the battery and EV production (1 million vehicle units)
• RMB 738 million for programs in the years 2011-2013; 42% of the development with focus on battery technology (about RMB 300 million)
New Energy Vehicle
Industry Development
Plan
Ministry of Industry and Information Technology (MIIT) & Ministry of Science and Technology (MOST):
• Planned subsidies of around RMB 100 million (~$15 million) to 2020
• Announced the biggest share of those subsidies for R&D, especially in battery technologies
• Goals for EVs till 2020 (5 million existing units)
• Up to RMB 60,000 incentive for private buyers
12th five-year plan
National people’s congress:
• Development of seven strategic industries – including the industry “New Energy Vehicle” (NEV)
2011-2015
2011-2020
2011-2015
18 PwC
Final Thoughts – China Question is not IF but rather HOW China gets to 30 million
12
16
20
24
28
32
2010 2011 2012 2013 2014 2015 2016 2017
Scenario Range Baseline
Source: Autofacts 2011 Q4 Data Release
China: Light Vehicle Assembly Scenario Forecast 2010 – 2017 (millions)
Cumulative additional quantity upside vs. base case
(„11-„17): +16.3 million units
Cumulative shortage downside vs. base case („11-„17): -17.0 million units
Presented by … [email protected]
The information contained in this report represents the culmination of proprietary research
conducted by Autofacts, an analytical group within the PwC Research & Analysis Organisation.
All material contained in this report was developed independently of any PwC client
relationship and does not represent the firm’s view as an auditor to any legal business entity.
While every effort has been made to ensure the quality of information provided, no
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