AUTOMOTIVE New Technologies Changing Automotive ......© 2017 IHS Markit West European car market...

© 2017 IHS Markit © 2017 IHS Markit. All Rights Reserved.

New Technologies Changing Automotive Markets in Western Europe

AUTOMOTIVE

Martin Benecke, Manager West Europe LV Sales Forecasting, +4920118579157, [email protected]

26 January 2017 | Frankfurt, Germany

© 2017 IHS Markit

Agenda

• Macroeconomic environment

• West European car market outlook

2

2017 New Year’s Briefing | 26 January 2017

© 2017 IHS Markit

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2000 2002 2004 2006 2008 2010 2012 2014 2016

Pe

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Consumers Industrial sector Services sector

Eurozone sentiment indexes have improved

3

Positive replies minus negative replies

Source: European Commission © 2017 IHS Markit


© 2017 IHS Markit

• Eurozone growth has picked up in the fourth quarter, reflecting strength in retail sales, new orders, and business and consumer sentiment.

• Political risks are elevated, however, with elections due in 2017 in Germany, France, the Netherlands, and possibly Italy.

• Aggressive monetary stimulus, a weaker euro, and reduced fiscal headwinds will help sustain growth.

• With inflation picking up only gradually, the European Central Bank (ECB) is not expected to raise interest rates until late 2018.

• The euro is projected to fall to slightly below parity with the US dollar by the end of 2017 before gradually recovering.

• Ireland, Spain, and Sweden will maintain relatively healthy economic growth, but the United Kingdom, Italy, and France will struggle.

4

Western Europe stays on a slow growth path


© 2017 IHS Markit

0,0

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Germany United Kingdom France Italy SpainAn

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2015 2016 2017 2018 2019–23

Real GDP growth in Western Europe

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Real GDP

Source: IHS Markit © 2017 IHS Markit


© 2017 IHS Markit

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2015 2016 2017 2018 2019–23

Real GDP growth in Western Europe

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Real GDP



© 2017 IHS Markit

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Germany UnitedKingdom

France Italy Spain Netherlands

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2015 2016 2017 2018 2019–23

Consumer price inflation will rise in Western Europe

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Consumer price index



© 2017 IHS Markit 8

0 5 10 15 20 25 30

SwitzerlandSwedenNorway

DenmarkPortugalSloveniaSlovakia

IrelandGreeceFinland

BelgiumAustria

NetherlandsSpain

UKItaly

FranceGermany

EU (28)Eurozone

US


Unemployment rates Most markets see positive employment trends

Unemployment rates


© 2017 IHS Markit

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Italy France Spain United Kingdom Eurozone GermanySource: IHS Markit © 2017 IHS Markit

Unemployment rates

December 2016

Unem

plo

ym

ent ra

te

2010

-16

Unemployment rates Most markets see positive employment trends


© 2017 IHS Markit Last point is Nov 16

12,00

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WE WE trend

Trend wise, WE sales are coming close to the levels we saw in the high phase 2009

© 2017 IHS Markit

Western Europe Passenger Car Sales –SAAR Much, much better but still a long way to go


© 2017 IHS Markit

Western Europe Passenger car market 2016

13.2 Million

244K 145K 112K 97K 58K 115K

14.0 Million

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6

8

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14

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2015 Italy Germany Spain France UnitedKingdom

Rest 2016

Sa

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in

Mil

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Recovery in big parts of Western Europe

+5.8%


© 2017 IHS Markit


32,1%

25,0%

17,3% 16,8% 15,5% 10,9% 10,4% 10,1% 9,7% 9,5% 9,0% 7,6% 7,0% 6,8% 5,1% 4,5%

2,6% 2,2%

-2,5%

-15,0% -20%

-10%

0%

10%

20%

30%

40%


Recovery in big parts of Western Europe


© 2017 IHS Markit

Western Europe Passenger car market Share of alternative propulsion vehicles (BEV, PHEV) from 2012-2016

0,0%

0,5%

1,0%

1,5%

2,0%

France UnitedKingdom

Germany Spain Italy WEU average

2012

2013

2014

2015

2016


New products + incentives support share, but still low level


© 2017 IHS Markit

West European car market outlook Germany 1 million BEV+PHEV by 2020 target, realistic?

0,6% 1,5% 3,2% 7,2% 16,0%

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2016 2017 2018 2019 2020

Share BEV+PHEV Share Non BEV+PHEV Car Parc BEV+PHEV


OEM targets ambitious – infrastructure + price +product crucial


© 2017 IHS Markit


14.0 Million

123K 45K 39K 38K -137K 18K

14.1 Million

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2016 Italy France Germany Spain UnitedKingdom

Rest 2017

Sale

s in

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Recovery is slowing down in big parts of Western Europe

+0.9%


© 2017 IHS Markit

Western Europe Passenger car market outlook 2017

14,3%

9,9% 9,7% 9,2%

6,8%

3,3% 2,3%

1,5% 1,2% 1,2% 1,1% 0,5% 0,3%

-1,4% -1,8% -1,9% -2,0% -2,2%

-5,1% -5,2%

-10%

-5%

0%

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15%

20%


Recovery is slowing down in big parts of Western Europe


© 2017 IHS Markit

West European car market outlook Germany

2,3% 3,7%

-9,1%

-1,9%

23,2%

-23,5%

8,3%

-2,4% -4,2%

2,9% 5,6% 4,5% 1,2%

-0,8% -2,7% -2,4% -0,6%

-30%

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0%

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30%

2,6

2,8

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3,2

3,4

3,6

3,8

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

TIV (%-change Y/Y, rhs) TIV (units)

Car sales will level off in a corridor of 3.1 - 3.25 m units


© 2017 IHS Markit

West European car market outlook Germany - new car regs by sales channel in % 2014-16

36,2% 34,2% 35,0%

40,2% 41,3% 40,3%

23,6% 24,5% 24,7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2014 2015 2016

Private Tactical Business

Private demand still weak – Growth coming from Business + Tactical

Source DATAFORCE


© 2017 IHS Markit

West European car market outlook United Kingdom

-5,0% -3,9%

2,2%

-11,1%

-6,5%

1,8%

-4,4%

5,4%

10,8% 9,4%

6,4%

2,2%

-5,1%

-3,1%

-1,2% -2,4%

-1,3%

-15%

-10%

-5%

0%

5%

10%

15%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021


Five year of annual growth coming to an end


© 2017 IHS Markit

West European car market outlook France

2,7%

-3,2%

3,2%

-0,7%

12,3%

-2,2% -2,1%

-13,9%

-5,7%

0,3%

6,8% 5,1% 2,3% 1,5%

0,9%

-2,4%

0,2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021


Slight recovery - Car sales will level off at around 2.0 m units


© 2017 IHS Markit

West European car market outlook Italy

-1,4%

3,8% 6,7%

-13,6%

1,1%

-9,7% -10,4%

-20,7%

-7,1%

4,5%

15,6% 15,5%

6,8%

-0,2%

0,8% 0,8%

-0,8%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0

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1

1,5

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2,5

3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021


Strong recovery with double-digit growth


© 2017 IHS Markit

West European car market outlook Spain

2,3%

-0,7% -1,5%

-28,0%

-17,5%

3,1%

-17,9% -13,6%

3,3%

18,3% 20,9%

10,9% 3,3% 2,1% 4,9% 4,0%

1,5%

-40%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021


3 years of double-digit growth


© 2017 IHS Markit

C

AG

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6 -

202

3

Southern European countries with room to recover, rest is saturated

West European car market outlook 2016-2023 by Top10 countries

-3%

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-1%

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3%

-350 -250 -150 -50 50 150 250 350

Volume changes in 1000 units



© 2017 IHS Markit

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Small and Compact segment growing due to SUV expansion

West European market outlook 2016-2023 segment development

-4%

-2%

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4%

6%

-240 -140 -40 60 160

in 1000 units



© 2017 IHS Markit

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SUV still the place to be – tough times for MPV

West European car market outlook 2016-2023 bodytype development

Hatchback LCV

MPV

Sports

SUV

Wagon

Sedan

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

-1.000 -500 0 500 1.000 1.500



© 2017 IHS Markit

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6 -

20

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FCA strong product activity should recapture some market share

West European car market outlook 2016-2023 by Top12 OEM

-3%

-2%

-1%

0%

1%

2%

3%

-300 -200 -100 0 100 200 300

Volume changes in 1000 units


© 2017 IHS Markit

Key takeaway box

31

• Europe remains in recovery mode, helped by release of pent up demand from post crisis years (not immune to risks).

• Fears that longer term demand could struggle to reach previous levels in Europe due to blend of fast-evolving transportation trends, emerging consumer behavior and changing demographics (esp. certain markets).

• OEMs helping to maintain/grow sales with promotional activity: heavily price discounting, special offers. Financial packages: highly flexible, full service package for peace of mind, low monthly payments. Helps justify N/T upgrades.

• Down sizing trend will broadly continue related to fuel economy concerns and in order to minimize taxes (esp. CO2 related taxation).

• So far, EVs remain hard sell, with consumers unwilling to switch without significant incentives (government/OEM/local).

• SUV remain a clear “winning ticket”. OEMs investing heavily in Crossover/SUV portfolio and future variants

• Premiums will continue to explore further into mass market while enjoying less competition from mainstream in upper segments (it has never been so easy to drive a premium car).


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