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World Car Trends 2014 “Smart Efficiency and Digital Intelligence” New York, April 2014

World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Page 1: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

World Car Trends 2014 “Smart Efficiency and Digital Intelligence”

New York, April 2014

Page 2: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

World Car Trends 2014

Global Expert Community Global Media Trends

69 Top Automotive Journalists TV, Print, Online News Channels

All World Car Jurors Blogs, Forums, Networks Social Channels

Top 25 markets Countries

All automotive brands [> 150] and models Brands

Page 3: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

World Car Trends 2014 | Summary

3

IntroductionThe World Car Awards brings together top journalistsfrom all over the world. PRIME Research combines theexpertise of this panel with our industry-leading mediastudy on over 150 brands across 25 markets globally.

Automotive Trends 2014Efficiency, lightweight materials, design, connectivity andnew energy powertrains are the most importantautomotive trends for 2014. These trends form part of abigger picture within the automotive industry, “theefficiency cluster” which we at PRIME call “SmartEfficiency”.

“Smart Efficiency”Smart Efficiency is driven by a variety of relatedtechnologies like the downsizing of engines, whileimproving power and performance, significant weightreduction and more stability, improved aerodynamicswhile increasing desirability and new energypowertrains; particularly plug-in hybrids.

Lightweight ConstructionsLightweight materials are currently in the spotlight. Oncereserved for premium cars, the Ford F150 has broughtaluminium to the mass market, and the BMW i3 haspositioned carbon fibre as a material manageable andsuitable for premium cars.

The Electric Vehicle Recession?After the hype in 2012, Electric vehicles are currentlylosing some momentum.

Plug-in hybrids are seen as the most promising electricdrivetrain option for 2014, however the onset ofpremium electric vehicles driven by the BMW i3 andTesla Model S bring electric vehicles back into thespotlight. Coverage around these two models accountsfor over 40% of all media coverage on electricvehicles. Our expert community evaluates these twomodels far better than first and second generation EVs.

“Digital Intelligence”Connectivity and in-car electronics rank as the fourthmost important trend, with infotainment andconnectivity systems seen as increasingly significant.Digital intelligence is describing a major macro trend ofthe years to come. Tech giants such as Apple, Google &Microsoft have now joined the game: teaming up withautomotive brands to create the next generation ofdigital cars.

“Smart Efficiency” and “Digital Intelligence” represent keytrends in the industry for 2014. Utilising these trends isthe challenge for the automotive industry today and inthe near future.

Page 4: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

Content

1. Top Automotive Trends

2. New Energy Cars

3. The “Digital Car“

Page 5: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Top 5 Trends 2014

Efficiency

Lightweight Materials

Design

Connectivity

New Energy Cars

Quality

Safety

Budget Cars

Car Sharing

0% 5% 10% 15% 20% 25% 30%

?

Efficiency is the top trend in 2014

The current “efficiency cluster“ is driven by downsizing of engines, lightweight constructions, improvedaerodynamics and plug-in hybrids.

“What will be the most important trends in the automotive industry in 2014?”

Plug-in Hybrids Battery Electric Vehicles Fuel Cell

5

4

3

2

1

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Efficiency Connectivity Efficiency

Connectivity EfficiencyLightweight Materials

New Energy Cars

New Energy Cars

Design

Design Design Connectivity

Budget CarsLightweightMaterials

New EnergyCars

Safety Budget Cars Quality

Quality Quality Safety

Lightweight Materials

Safety Budget Cars

Car Sharing Car Sharing Car Sharing

0% 10% 20% 30% 0% 10% 20% 30%

2012 2013

0% 10% 20% 30%

2014

?

Lightweight is the top emerging trend in 2014

The importance of lightweight constructions and materials has been on the increase since 2012.

“What will be the most important trends in the automotive industry in 2012 / 2013 / 2014?”

8

5

2

Page 7: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Downsizing of Engines / Powertrains

The actual downsizing of an engine for weightreduction is seen as the most promising technology to save weight.

AluminiumThe new Ford F-150 shifts the image of aluminiumfrom a rather exclusive to a more volumematerial for weight-saving.

Material-MixClever material mix is seen as a very promising option for weight saving.

Carbon Fibre

The BMW i3 could change the perception of carbon fibre: from an expensive and exclusive to an affordable, mass-market material for weight-saving.

High Strength Steel

High strength steels are still evaluated very positively, but are seen due to the already wideuse within the industry as a kind of maxed out option for weight saving.

0 1 2 3

very goodmixed

?

Engine downsizing is seen as the most promising weight saver

Two important shifts in perception – the Ford F150 for aluminium and the BMW i3 for carbon fibre.

“From your point of view, what are the most promising lightweight technologies?”

2014Expert Panel

good

Page 8: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

Content

1. Top Automotive Trends

2. New Energy Cars

3. The “Digital Car“

Page 9: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

9

Efficiency Connectivity Efficiency

Connectivity EfficiencyLightweightMaterials

New Energy Cars

New Energy Cars

Design

Design Design Connectivity

Budget CarsLightweight Materials

New EnergyCars

Safety Budget Cars Quality

Quality Quality Safety

Lightweight Materials

Safety Budget Cars

Car Sharing Car Sharing Car Sharing

0% 10% 20% 30% 0% 10% 20% 30%

2012 2013

0% 10% 20% 30%

2014

?

Electric vehicle recession?

After the hype in 2012, electric vehicles finally arrived in ”reality“ – but electric vehicles are still among the top 5 most important trends within the industry.

“What will be the most important trends in the automotive industry in 2012 / 2013 / 2014?”

3 3

5

Page 10: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Visibility of EVs is pushed by Tesla Model S and BMW i3

Out of more than 250 EV models in 2013-2014, the Tesla Model S and BMW i3 combined account for more than 40% of all coverage. Almost every second electric vehicle story is about either one of them.

2,0%

2,9%

4,8%5,1%

4,6%4,8% 4,8%

0%

3%

6%

9%

12%

2008 2009 2010 2011 2012 2013 2014

100% = Total automotive media coverage in respective year

Media Panel | Share of coverage

Emerging Trend Hype SlowdownTesla and BMW igame changer? Other EVs

58.3%

BMW i321.3%

Tesla Model S20.4%

2013-2014

100% = Total e-car coverage in 2013/2014

42%

100% = Total electric vehicle coverage in 2013/2014

Page 11: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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► But safety issues remain.

► New momentum through premium electric vehicles.

Plug-in hybrids

Electric vehicles withrange extender

Battery electric vehicles

Fuel cell vehicles

-3 -2 -1 0 1 2 3

very poor very goodmixed

?

PHEVs remain the most promising electric drivetrain option

However, BEV are experiencing a new momentum through premium electric vehicles.

“From your point of view, what are the most promising powertrain options regarding e-mobility?”

2014Expert Panel

2013Expert Panel

Is the Tesla Model S a game changer? Combining zero emissions with a good range and breathtaking sports car performance.

2013 20143

Page 12: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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“Compromised“ electric vehicles

Premium electric vehiclesTesla Model S

BMW i3

Second generationand compactelectric vehicles

First Generation and low budgetelectric vehicles

-3 -2 -1 0 1 2 3

?

Tesla and BMW with outstanding EV reputation

BEV gain credit in 2014 due to i3 and Tesla Model S – Premium electric vehicles might be the game changer in the future.

“How would you rate the following e-cars from a general perspective?”

2014Expert Panel

very poor very goodmixed

2

1

Page 13: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Norway: Tesla achieves an 11% market share in March ‘14

Exponential growth of EVs in Norway; especially the Tesla Models S due to generous government subsidiaries.

› EVs in Norway achieved a 5.6% market share in 2013.

› No purchase tax, no VAT, no tolls are making EVs very attractive.

› Free and extra parking areas for EVs.

› EV infrastructure.

› Clean Norwegian energy production.

0

2.000

4.000

6.000

8.000

10.000

12.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Electric vehicles registration figures in Norway

Page 14: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Norway

Japan

Germany

USA

France

UK

China

Italy

Spain

very poor very goodmixed

?

Norway with pioneering character regarding E-Mobility

The former benchmark market for E-Mobility, Japan, slightly loses the confidence of the expert community and remains on one level with Germany and the USA.

“Which markets will be the key drivers for e-mobility?”

2014Expert Panel

2013Expert Panel

The Tesla factor› Supercharger

infrastructure› Plans for

batterygigafactory

Ambitious plans, limited momentum› 5 million e-cars in

2020› New joint-venture

brands arrive› Denza› Zinoro

Page 15: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Fuel-Cell with chances in the long run

In the last 10 years, Honda showed the strongest ambitions of all manufacturers regarding fuel cell technology, followed by Hyundai/Kia and Mercedes-Benz.

0,5%

0,4%

0,6%0,6%

0,5%

0,1%

0,3%

0,1%

0,3%

0,3%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Fuel-Cell “Hype“ periodMost major manufacturers focus on FCEV as battery technology is not improving fast enough and the range issue as well as high costs are thought hard to be solved.

Attention-shift to BEVFirst volume BEV appear on themarket and the BEV hype begins. Manufacturers shift their focus on battery electric vehicles rather thancontinuing their FCEV strategy.

100% = all automotive coverage in respective year

Re-Focus on FCEVEspecially Hyundai/Kia continues tofocus on FCEV and in 2014 announcements of affordable FCEV in series strongly increase.

Comeback as “Next Generation EV“?FCEV in series (announcements): Hyundai/Kia: 2014 | Toyota: 2015 | Honda: 2016 | Daimler: 2017

Page 16: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

Content

1. Top Automotive Trends

2. New Energy Cars

3. The “Digital Car“

Page 17: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Connectivity is already a key factor in evaluating a car

For 71% of automotive journalists, connectivity already is or is quickly becoming a key factor in evaluating a car.

? 2013 Expert Panel: “Is connectivity a key factor in evaluating a car?”

“Yes, as it becomes a priority for young buyers.”

“It is becoming a key factor, because younger people do not care aboutpowertrains, maximum speed and emotional driving anymore.”

“Not yet but is going to grow once they sort out the basics.”

“No. Ease of use is, but connectivity is not critical. It's also very difficult to

communicate, given that average readers just want to know if they can plug the

phone in or not.”

Already[29%]

Increasingly[42%]

Not yet[17%]

No[12%]

Page 18: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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In-car electronics and connectivity are increasingly important

Exponential increase of media attention to in-car electronics and connectivity.

0,1% 0,1%0,2%

0,1% 0,2%

1,5% 1,5%

3,9%

6,4%

0%

3%

6%

9%

12%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Media Panel | Share of coverage

100% = all coverage about “product strategy“ in respective year

In-car electronics play an increasinglyimportant role within the product

strategy.

Internet-basedInfotainment Systems

Driver Assistance

Navigation

Communication

0% 20% 40% 60%

Top Connectivity Trends

? 2013 expert panel: What will be the most important connectivity trends in the automotive industry in 2013?”

2013Expert Panel

Page 19: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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The “digital” car | > 100 million lines of code

Cars are no longer only hardware, they are also software products. Cars already have more lines of code than aircrafts and operating systems like Windows 8 or Apple Tiger.

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

80.000.000

90.000.000

100.000.000

F35 Fighter Jet

Boeing 787

US Military Drone

F22 Raptor Fighter Jet

Space Shuttle

Car Software and its

“lines of code”

of average modern

high-end-car

Page 20: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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“Fiat spent years betting on the wrong Microsoft horse.”

The Ford Sync system is also far away from being benchmark:

“Ford, with its hopeless voice command system, small screens and convoluted programming if you can't get the voice commands to work.”

?

Silicon Valley is moving in on the car industry

Google is clearly seen as the key driver for the “digital car”. Apple and Microsoft are seen as more conservative.

0 1 2 3

pro-active/aggressivepassive/conservative

“Which IT companies will be the key drivers for the “digital car”?”

2014Expert Panel

Page 21: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

21?

Autonomous driving wins credit in 2014

Overall, safety related driver assistance systems are evaluated much more positively than comfort features.

Brake Assist Systems

Pre-Crash Systems

Intelligent Lights

Pedestrian Detection

Blind Spot Detection

Adaptive Cruise Control

Automated Crash Reporting

Traffic Sign Recognition

Attention Assist

Nightvision Systems

Lane Keeping Systems

Park Assist

Autonomous Driving

-3 -2 -1 0 1 2 3

not important at all very importantmixed

“How important and desirable are the following ‘Advanced Driver Assistance’ features from your point of view?”

2014Expert Panel

2013Expert Panel

Page 22: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

22?

Autonomous cars are expected within the next 5 years

The world car experts are anticipating autonomous cars in series production within the next five years.

“When do you expect to see fully autonomous driving cars in series production?”

5 Years

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Page 23: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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USA, Germany and Japan are clearlyseen as the key markets for autonomous driving.

?

Key markets for autonomous driving are USA, Germany, Japan

Due to high costs and the need for infrastructure, autonomous driving will be strongly pushed by the mostdeveloped car markets.

USA

Germany

Japan

UK

France

China

Italy

Spain

-3 -2 -1 0 1 2 3

reluctant pro-active/aggressivepassive/conservative

“Which markets will be the key drivers for autonomous driving?”

2014Expert Panel

Page 24: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Legislation (on federal & national level)

Infrastructure Investments

Industry standards for Car-to-Car and Car-to-X communications

Consumer Acceptance

Integrity of Technology

New Business Models & Scenarios

Automotive Ecosystem (new players)

0 1 2 3

mixed very importantimportant

Challenges to autonomous driving

Legislation is seen as the biggest challenge to autonomous driving, closely followed by infrastructure and industry standards for Car-to-Car and Car-to-X communications.

? “How important are the following challenges enabling autonomous driving from your point of view?”

2014Expert Panel

Page 25: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

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Safety is the key to consumer acceptance of autonomousdriving.

?

Safety is key to consumer acceptance of autonomous driving

However, extra costs are seen as the second most important factor to clear the way for autonomous cars.

Safety / crash elimination

Extra cost

Reduced travel times

Comfort

Increased productivity (work while driving)

Data protection

Improved energy efficiency

Reduced need for new infrastructure

New models of vehicle ownership (e.g. car sharing)

0 1 2 3

very importantmixed

“How important are the following factors from your point of view regarding the consumer acceptance of autonomous driving?”

2014Expert Panel

City motorists in Europe and the US waste Ø 60-80 hoursper year in congestion.

important

Page 26: World Car Trends 2014 Car of the Year Study...World Car Trends 2014 | Summary 3 Introduction The World Car Awards brings together top journalists from all over the world. PRIME Research

Dr. Rainer Mathes

PRIME Research

Chairman

[email protected]

Bernd Hitzemann

PRIME Research

Project Director

[email protected]

Jens Meiners

World Car Awards

Director Steering Committee World Car Awards

[email protected]

PRIME Ann Arbor (USA)

PRIME New York (USA)

PRIME Montevideo (Uruguay)

PRIME São Paulo (Brazil)

PRIME Shanghai (China)

PRIME Delhi-Gurgaon (India)

PRIME Oxford (UK)

PRIME Mainz (Germany)

PRIME Zurich (Switzerland)

Contact