INAUGURATION - Busworld Latin America · • Telematics will experience rapid proliferation,...

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Welcome and introductions 1 INAUGURATION

Transcript of INAUGURATION - Busworld Latin America · • Telematics will experience rapid proliferation,...

›Welcome and introductions

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INAUGURATION

›Director of the Busworld Academy

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Mr. Jan Deman

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Worldwide Bus sales 2010 - 20162016: A record year for bus sales with 364,000 (+8.1%) units sold.

2017: Policy distortions are likely to negatively impact bus demand.

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Worldwide Bus sales 2010 - 2016

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Worldwide Bus & Coach sales in 2015 - 2016

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Worldwide Bus-sales in 2020

›Minister for transport in Colombia

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Mr. Cardona Gutiérrez

›Ambassador of Belgium to Colombia

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Mrs. Jana Zikmundova

›President of Busworld International

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Mr. Didier Ramoudt

›Mr. Hernan Cavarra, Industry Analist, Frost & Sullivan

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Keynote:

“ The Latin American Market for buses and coaches: facts and figures

›Despite Headwinds Transformative Trends Expected to Propel LATAM Bus Market to Over 48,000 Units

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Brief Insights on the Latin American Bus Market

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Agenda – Our 15’ minute journey

Top Transformational Shifts and Urban transportation

LATAM Bus Market – Now and 2022, what´s next?

Conclusions, examples and a peek into the future

"A Developed Country is not a place where poor have cars. It's where the rich use Public Transportation"

Enrique Peñalosa, Mayor of Bogota, Colombia

Many times we ask what is happening around us…The Red Queen Effect

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Top Transformational Shifts that will shape the Future of Mobility

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Multi-modality

Transit Buses, Urban

Rail, and Taxis

Dedicated Road Lanes

Preference for Shared

Mobility Models

Leveraging Big Data

Fleet-readiness and

Meeting Peak Hour

Demand

Electric Mobility

Transit Buses will

Pioneer the Zero-

emission Drive

Mobility Integration

Smartphone-enabled

Seamless Commuting

Battery & Charging Tech

OEMs are Entering New

Markets and

Partnerships

Chinese OEMs

Expansion

Growing Market

Penetration

Megatrends Influencing

the Bus Market

Organization, Connectivity,

New Business Models,

New Fuels of the Future

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Impact of Top Mega Trends on the Bus Market

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• Telematics will experience rapid proliferation, thereby

elevating passenger transport efficiencies and resulting in

reduced commuting time and operating costs.

• Applications, such as prognostics, will deliver meaningful

total cost of ownership (TCO)-related value, Wi-Fi

connection, smartphones apps, track-and-trace systems,

fuel cost reduction, and security enhancement-focused

applications to deliver value in emerging LATAM markets.

Urbanization

Connectivity—Mobile Resource Management

• Development of BRT systems expected to lead to foster

Heavy duty over 12m length city transit buses, leading to

further polarization of bus classes.

• There will be an increment in demand for natural-gas and

hybrid-electric buses by 2023.

• Urban population density growth will influence new bus

designs and usher the proliferation of HD transit city

buses.

Mega Trend Implications

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Impact of Top Mega Trends on the Bus Market

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North

America

Latin America

China/India

Existing BRT with expansion plans

HD Transit Bus Market: BRT System, Global, 2015–2022

New BRT systems in planning phase

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Key Influencing Trends

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• Being a BRT hub, LATAM will drive

innovation and the mass adoption of IT

services in transit buses and other mass

transit modes.

• Investments will be made in ICT solutions

and upgrades to 4G/5G networks to reduce

carbon footprint and augment wireless

CCTV access.

Policy Drivers BRT Status

Green Tech Incentives

• LATAM will need at least 2-3 years to recover

from the economic crisis.

• Mexico, Chile, and Peru will be the major growth

drivers for buses until 2018.

• By 2020, 50,000 old buses are likely to be

replaced by new energy buses across LATAM’s

major cities.

• Road tax exemption is in place in only a few

countries for plug-in and electric buses. Colombia

has earmarked $40 million for 2013 to 2017.

• EV buses are being tested in Sao Paulo, and

Mexico City and Argentina have called for an open

tender to acquire 400 EV buses for its national

BRT corridors.

Intelligent Mobility Drive

Current 202267 108Number of cities

209 335Number of corridors

1,813 km 3,050 kmLength

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Impact of Top Mega Trends on the Bus Market

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New Fuels of the Future• Natural gas to gain marginal penetration rate among various

powertrain fuels in heavy duty buses, mainly in Mexican andPeruvian bus markets and possibly Colombia as well althoughwith low crude oil prices, NG powertrain is not such aninteresting option and H&E gain future penetration.

• Hybrid and electric powertrain technologies to achievehighest CAGR growth until 2022, and at an accelerated pacethereafter thanks to BRT systems development.

• Diesel to continue as the most common fuel, representing86.1% to 91% of all powertrain fuels in new Bus and Coachesin 2022.

Mega Trend Implication

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Unit Shipment Forecast by Powertrain and Country

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Total Bus Market: Unit Shipment Forecast by Powertrain, LATAM, 2016 – 2022

Optimistic Scenario

2022

Diesel,

86.1%

2016

Diesel,

97.6%

90.0%

85.0%

75.0%

97.3% 78.0%91.5%

15.0%

7.0%.

6.0%..

1.7%.

7.0%..

.2.8%.8.0%.

4.0%..

0.5%.

4.5%

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10,0

15,0

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Diesel NG Gasoline Hybrid Electric

~ 48,446

5.9% CAGR

2022 Regional Sales

5.5%0.5% 8.5%

1.0%

~34,310

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2.0%

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4.2%

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4.5%

4.5%

4.1%

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1.2%

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H&EV0.22%

Unit Shipment Forecast by Powertrain - LATAM

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Diesel; 86,1%

NG; 4,1%

Gasoline, 0.5%

Hybrid, 4.5%

Electric; 4,8%

Diesel97.6%

NG; 1,2%

Gasoline;

1,0%

Hybrid; 0,2%

Electric

0.01%

CAGR 5.9%

Total Bus Market: Percent Unit Shipment Forecast by Powertrain, 2016-2022

98%

93%

86%

1,17%

2,50%

4,08%

0,97%0,75%

0,49%

0,21%

2,50%

4,04%

0,01%

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Unit Shipment Forecast by Powertrain and Country

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Total Bus Market: Unit Shipment Forecast by Powertrain, LATAM, 2016 – 2022

Pessimistic Scenario

2022

Diesel,

91.2%

2016

Diesel,

97.6%

96.5%

93.0%

80.0%

98.0% 86.0%93.5%

15.0%

3.0%.

3.0%..

1.0%.

1.5%..

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4.0%.

2.0%..

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2.0%

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Diesel NG Gasoline Hybrid Electric

~ 48,4465.9% CAGR

2022 Regional Sales

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2.0%

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4.6%

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H&EV0.22%

2.0%

1.8%

Electro-mobility and buses – the need?

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HD Transit Bus Market: GHG Emission in Transportation, Global, 2015

Public transit systems rank as being the most efficient in terms of GHG emission perpassenger-km. Transit buses adopting green powertrain technologies is a significant steptoward a sustainable public transit system.

Powertrain Outlook

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Region

Powertrain

Diesel/Biodiesel NG Gasoline Hybrid Electric

High demand in 2022Market in 2015 Moderate demand in 2022 Low demand in 2022

Total Bus Market: Powertrain Standard Overview, LATAM, 2016–2022

H&E= Hybrid and Electric

Snapshot of LATAM Bus Market in 2022

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~34.3 (000) in

2016

~48.5 (000)

in 2022

5.9%

Chile

~ 3,300

[ 5.0% ]

Peru

~ 3,676

[ 1.6% ]Brazil

~ 19,070

[ 9.2% ]

Mexico

~ 11,000

[ 2.3% ]

Argentina

~ 5,000

[ 7.0% ]

~55 Unit

in 2016 [ 0.1% ]

~5.4 (000)

in 2022 [ 9.3% ]

115%

Electric and Hybrids

powertrains Sub-

segmentTotal LATAM Bus

Market

CAGR

%

% d

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Total Bus Market: Unit Shipment Forecast, LATAM, 2022

Colombia

~ 6,400

[ 6.5% ]

Partial Matrix of OEMs and Powertrain

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Cu

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Diesel NG/Biodiesel

Powertrain

Hybrid

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16

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Plug-in Fully Electric

Total Bus Market: OEM Powertrain Standard Overview, LATAM, 2015-2022

• Most of the major OEMs operating inLATAM sell hybrid and plug-in hybridbuses in their respective domesticmarkets.

• Product launches and mass adoptionwill happen post 2020 as limited fundingand incentives are likely in the shortterm due to the economic crunch.

2016-2019

2016-2017

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Impact of Top Mega Trends on the Bus Market

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New Business Models

• Platform-based production is a key phenomenon associatedwith globalization. It provides cost optimization benefits duringproduct development and enables the fulfilment of dynamicend-user preferences.

• OEMs and suppliers to explore opportunities with dedicated“value” bus models to penetrate and expand in emergingmarkets.

• Greater European OEM focus on creating value bus brands forthe mid-segment market while Chinese OEMs will focus on lowcost offering and new fuels and powertrains options.

• Soft technologies (e.g., telematics, safety, data analytics) willemerge as major growth strategy model ingredients for OEMsand suppliers.

Mega Trend Implication

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SWOT Analysis

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Strengths Weaknesses

Opportunities Threats

• Lack of developed urban

and inter city trains and

railways

• Expanding mega cities

needing well developed

transport systems

• Low-cost Chinese OEMs

focusing on LATAM market and

establishing production sites

• New taxation reforms to fuel

hybrid and EV bus introduction.

• Expanding BRT Systems

fueled by national

governments

• New emission regulations

being adopted to adapt to

developed markets

technologies

• Underdeveloped HD

market niches in Chile

and Peru

• Economic and political

crisis characterized by low

GDP and lack of

governmental investments

in public transport

• Lack of well-developed

INFRASTRUCTURE In

Chile, Peru, and Argentina

for EV units introduction

• Energetic crisis in

Argentina undermines EV

market development

• Development of subway

lines in main LATAM

cities

• Political and economic

crisis in Brazil will push

the market down until

2019

Chinese OEMs Expansion in LATAM Bus Market

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Total Bus Market: Market Share by OEM,

LATAM, 2016

Total Bus Market: Market Share Forecast by

OEM, LATAM, 2022

MB42,2%

MAN/VW9,3%

Volvo5,2%

Scania6,9%

IVECO2,5%

Agrale4,2%

Dina4,0%

International

4,2%

Hyundai1,8%

HINO3,3% GM

4,5%

Yutong0,4%

Other Chinese

5,4%

Others5,9%

MB42,5%

MAN/VW10,5%

Volvo8,0%

Scania6,0%

IVECO2,5%

Agrale4,8%

Dina4,0%

International

3,5%

Hyundai2,0%

HINO3,5%

GM5,5%

Yutong3,0%

BYD1,0%

Other Chinese

1,5%Others1,7%

Frost & Sullivan predicts that Chinese OEMs will experience steep growth in the select LATAM busmarket mainly fueled by low cost portfolio offering and Electric powertrain advanced development

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OEM Performance in 2015

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0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000

Mercedes-Benz

MAN / VW

Scania

Volvo

Agrale

Yutong

Chinese

International

DINA

Hyundai

GM

Brazil Argentina Mexico Chile Peru Colombia

Daimler is expected to increase it portfolio offering

with value bus options to compete with the Chinese

low-cost offering strategy as well as less than 12

meters buses in Colombia.

While Volvo is expected to lead the electric bus drive, other

European OEMs are expected to catch-up quickly with slew of

product launches and alternative powertrain options such as

natural gas in Mexico and Peru.

The launch of electric and hybrid buses, the increasing

export footprint, and domestic production sites

investments in Brazil and Mexico are expected to bolster

Chinese OEMs’ brand strength, being BYD the current

flagship and Yutong the biggest.

Total Bus Market: Unit Shipment by Key OEMs, LATAM, 2016

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Bus Attribute Focus of OEMs

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Electrification and Hybridization

Next Generation Powertrain

Technology

Safety Systems

Comfort and Convenience Features

Vehicle Connectivity

Vehicle Customization

Price Sensitivity

Strong

Trend Moderate

Trend

Trend in

2016

Trend in

2022

Low

Trend

1 2 3 4 5

HD Transit

Low High

MD Transit MD Inter City HD Inter City

Total Bus Market: Technology Outlook by Sub-segment, LATAM, 2016–2022

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1:1 Market Cooperatives 1man = 1 bus. Disorganized, nofixed routes, no fixed fares.

Case Studies: Colombia - BRT

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Before Now

Cities are consolidating organized publictransport systems. Organized masivetransport systems BRT,«alimentadores», fixed routes and fares.

Challenges fot BRT

• Error in passengers estimates• No government subsidies• Illegal transport (moto-taxismo)• Private operators bankrupcy• Robust regulation regarding safety,

certifications, accessibility• Problems with supply chain (tires, OEMs

service and spare parts

• Strong government measures againts illegal transport

• Regulate a well price structures scrapping program for usedbuses

• Create Government subsidies like in Chile, Argentina or Europesince the system is not self-sustainable with the ticket prices

• Regulate routes so as to avoid cannibalization between BRT and traditional buses lines and create harmonization between BRT and «alimentadores» (feeder buses).

• Invest in INFRASTRUCTURE in those cities where its stilldefficient or there are lack of covered rooutes (Ex. Bucaramanga)

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Case Studies: Colombia - BRT

Possible Solutions?

Case Studies: Colombia Market

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• In Colombia there are 2 types of markets: o Traditional (mainly feeders market, Buses of 12 mts and less) that mantains

stable in 2,500 to 2,600 units per year (urban and inter-municipal) that has a natural renewal every year ans is more stable . Operator can buy up to 10 unitsand there are growth perspectives.

o BRT (Sistemas Integrados – Transmilenio, Transcaribe, MIO, etc): Articulated, Bi-articulated, HD buses mainly. They are undergoing a crisis, with privateoperators in bankrupcy or owing large amounts of money to banks, financialinstitutions and supply chain. They are in need of fleets renewal and instead of growth, renewal of units is more probable BUT Changes are needed. Cycles of renewal are of 5 years in average and is more volume sale for OEMs.

• Market is often impacted by GDP variations and regulations (such as safety) thatdetermine units sales. Small cities are good market niches for Traditional marketwhile BRT is only possible in big cities with big avenues and infrastructure due toturning radius, bus volumes, etc.

Case Studies: Colombia Market

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• Regarding powertrains and fuels future market Diesel will remain dominant in Colombia although is a regional benchmark in Hybrids and EV buses.

• Colombia demands Euro IV fuels at a national level although Transmilenio demands Euro V and Medellín is moving towards that goal due to emission issues.

• NG was an option 2 years ago and even GM launched a unit with this powertrain but due to NG rising costs and crude oil low prices, its not so attractive. Also NG can only be utilized on fixed routes (due to lower autonomy) and demands big infrastructure investments for recharging. So…Its NG an actionable option?

• Hybrids and EV are also being studied for the BRT systems replacement but againinfrastructure for recharging stations and also higher units prices and service are bigchallenges.

• Long Distance Bus Market is an interesting market niche with good potential due topeace negotiationn with FARC that permits safer journeys Low Cost flights competition is only a challenge for less than 500 kms distances. Important: Entertainment systems and comfort.

LATAM

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• Stable urban MD (less than 12mts) market (2,800 – 3,000 per year) with naturalrenewal cycle every 5 to 6 years to mantain low TCO.

• Long distance makret in crisis since they lost subsidies to diesel and disabledpassengers.

• 2013 and 2014 peak sales are almost impossible to obtain again. It was due toexcess of liquidity (FINAME) Soft credits, low taxes and long payment termsMore parc than demand.

• It need to solve first it political and economic crisis. Market will grow by2018-2019 thanks to fleet renewal needs mainly.

• Between 2019 and 2022 growth will be experienced in Mexican market pushedby units renewal and introduction of NG, Hybrids and Eletrical powertrains forBRT lines mainly in main Mexican cities (DF, Monterrey, Guadalajara, etc)

• Worst scenario Only 1 BRT line in Lima*, but there is a big challenge in termsof informality, lack of regulation in routes and tickets prices.

• Between 2018 and 2019 EURO IV emission standards are going to beimplemented in Peru and fleet renewal will push sales.

• Possible EV buses implementation.

Key Predictions

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The Bus Market will experience will account for about 48,500 units by 2022 reaching a

5.9% CAGR growth for the 2016-2023 period. Although BRT systems development across

the region will be pushing the market, the MD segment will be of great importance and

account for most volume sales due to regional countries cities geographies and

topography.

While European OEMs will continue to dominate the market with Mercedes-Benz

dominating the overall bus market in each of the studied countries, Chinese OEMs

could increase their market penetration (mainly BYD and Yutong), pushed by the

development of H&E (BEV and PHEV) transit buses for the growing BRT systems in the

region and the establishment of overseas production units, either through subsidiaries or

acquisitions. Volvo & GM also could grow thanks to its electric and NG powertrain bus

development but AGAIN INFRASTRUCTURE is the key word.

Although Brazil and Mexico will be leading the market in terms of units sales,

Colombia, Argentina and Chile will experience the highest growth in the overall

market, growth by 2022. Peru will be LATAM’s second-largest MD market while Chile will

be LATAM’s third-largest inter-city market and Argentina the third largest in the transit

segment by 2022.

The Red Queen effect

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That is that for today, thank you for your attention

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Hernán CavarraSr. Industry Analyst

Intelligent Mobility – Automotive & TransportationDirect: +54 11 4776 8069Email: [email protected]

Programme

11:30 – 12:30 Reception

14:30 – 17:00 Manufacturers Debate: Future trendsZhengzhou Yuton Bus, Volvo Bus, Yellow Window, Voith Turbo

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