WELCOME [] · • Major market share shifts • Major geographic shifts ... CAR U.S. Light Vehicle...
Transcript of WELCOME [] · • Major market share shifts • Major geographic shifts ... CAR U.S. Light Vehicle...
WELCOME
AUTOMOTIVE COMMUNITIES PARTNERSHIP
& CAR AFFILIATES OUTLOOK
JANUARY 12, 2017
HOSTED AT GENERAL MOTORS WORLD HEADQUARTERS
DETROIT, MI
CAR Affiliates
Industry Collaboration & Working Groups
Industry Collaboration & Partnership Examples:
• Advanced Powertrain Thought Leadership Roundtable
• Connected & Automated Vehicle Working Group (MDOT)
• Coalition for Automotive Lightweighting Materials (CALM)
• Automotive Cybersecurity Roundtable
• Automotive Communities Partnership (ACP)
The Center for Automotive Research brings together industry stakeholdersfor thought leadership and industry education.
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A Tale of Two Plateaus Average Monthly Sales (SAAR)
1992 – 2020
Source: Automotive News Data Center and CAR Research
CAR Forecast
Average Monthly Sales
?
Early 2000s
• OEM and supplier overcapacity
• Major market share shifts
• Major geographic shifts– Closures predominantly in the North
– Internationals grew predominantly in the South
2015 – 202X• Industry struggling with capacity
constraints• Steady market share by company• Steady geographic footprint
– But growth going to Mexico
• The result: Automotive economic development strategy uniformity– Retain existing OEM base– Expansion, not new plants, most
realistic OEM opportunity– Retention of supply base critical– Select opportunities for supplier growth
A Tale of Two Plateaus
The Next Few Years
• Steady sales and production belie underlying transformation• Rapid adoption of new technologies and materials
• Fuel economy• Emissions Reduction• Safety• Connectivity • Autonomous capability
• It’s not just the vehicle that’s changing• New production processes, technologies, and capabilities will be essential• Constant need for R&D• Constant demands on region’s workforce abilities and availability
• Is your community or company ready?
UPCOMING
EVENTS
CAR Industry Briefing:
Cross-Border Collaboration: Driving Regional
Competitiveness in Advanced Mobility
FEBRUARY 8, 2017Schoolcraft College, VisTaTech Center
Livonia, MI
T3 Manufacturing Summit:
Technology • Tooling • Talent
APRIL 24-25, 2017DeVos Place
Grand Rapids, MI
CAR Management Briefing Seminars:
JULY 31 – AUGUST 3, 2017Grand Traverse Resort
Traverse City, MI
VISIT CARGROUP.ORG FOR MORE INFORMATION
TODAY’S AGENDA
North American International Auto Show Preview
8:00 Room Opens / Continental Breakfast Available
8:30 Meeting Begins, Welcome and Introductions – Bernard Swiecki, Director of ACP, CAR
General Motors Welcome – John Blanchard, Director, Local Government Relations
Thomas Klier, Senior Economist, Federal Reserve Bank of Chicago
Sue Yingzi Su, Senior Economist–North America and China, General Motors
10:00 Break
Dave Andrea, Executive Vice President of Research, CAR
Jeff Schuster, Senior Vice President, LMC Automotive U.S. Inc.
Charles Chesbrough, Executive Director, Strategy & Research and Senior Economist Original Equipment Suppliers Association
Closing Remarks – Bernard Swiecki, Director of ACP, CAR
12:00 Lunch
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The Automotive Landscape:Increasingly Abstract
Dave Andrea, Center for Automotive Research
CAR Automotive Communities PartnershipJanuary 12, 2017
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U.S. Light Vehicle Sales
Percent Change YTD Through December: 2016 vs. 2015
-8.9%
7.4%
0.3%
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Passenger Cars
Light Trucks
Total
Source: Automotive News; CAR Research
56,211
17,539,052
100%
+ 729,801
10,645,974
60.7%
-673,590
6,893,078
39.3%
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U.S. Market Share
2000 – December 2016 YTD
28.2%
17.3%
9.3%
14.0%
24.2%
14.8%14.5%
12.9%
4.3%
8.9%6.7%
9.3%
2.3%
8.1%
0%
5%
10%
15%
20%
25%
30%
35%
Perc
ent
of
U.S
. Mar
ket
Sale
s
Year
GM
Toyota
Ford
Chrysler
Nissan
Honda
Hyundai-Kia
Source: Automotive News; CAR Research
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Segment Breakdown - U.S. LV Sales Percent Change
December YTD 2016 vs December YTD 2015
-11.3%
-9.3%
-8.3%
-5.6%
-3.6%
5.9%
5.9%
6.3%
8.9%
23.5%
0.4%
-15% -10% -5% 0% 5% 10% 15% 20% 25% 30%
Middle Car
Luxury Car
Large Car
Small Car
Large CUV
Middle CUV
Pickup
SUV
Van
Small CUV
Total
Source: Ward’s Automotive Reports
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Trend, Cycle and Mix are In-Play
Trend
Units
Mix
• Personal & Corp. Tax Policy
• Fiscal Stimulus
• Employment/Income Growth
• Consumer Confidence
• Monetary Policy
• Immigration Policy• Federal & State
Government Philosophy• Trade Policies
• Energy Policy
• CAFE/GHG/ZEV mandates
• Safety Regulations
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CAR U.S. Light Vehicle Sales Forecast, 2017 – 2022
11.612.7
14.415.5
16.517.4 17.5 17.5 17.4 17.3 17.0 17.5 17.6
0
5
10
15
20
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
U.S
. LV
Sal
es
in M
illio
ns
Source: CAR Research, January 2017
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CAR Sales Forecast
15.0 M
16.0 M
17.4 M17.5 M
Source: CAR Research, January 2017
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Big Question: What Falls First – Spending or Units?
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do
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In Spending (Billion of 2009 $) In Units
Source: BEA, Table 7.2.6B. Real Motor Vehicle Output, Chained Dollars
Both Spending and vehicle sales exceed 2006 level
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The Industry Is Making Investments on Many Fronts
and Individual Company Focus is Very Different
Corporate Competitive Sets and Customer Markets Blurring on these Fronts
Powertrain
Vertical Integration
Global FootprintMobility Services
Connected/Automated
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Personal Vehicles - The Commute Workhorse:
U.S. Principal Means of Transportation to Work
Source: U.S. Department of Housing and Urban Development, American Housing Survey, 1989 , U.S. Census Bureau
U.S. Department of Commerce, American Community Survey, 2011, U.S. Census Bureau
Automobile85%
Public Transportation
5%
Walks Only3%
Work At Home5% Other
2%
2015
Automobile87%
Public Transportation
5%
Bicycle and Motorcycle
1%
Walks Only3%
Work At Home2% Other
1%
1989
VMT is Where It’s At, But We Need to Get to
Passenger and Ton Freight Miles Traveled
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What If Transportation Was Seamless and Led
Consumers to Truly Purchase Mobility?
Barriers to Pure Extrapolation• Economics (vs. 9,500 miles average):
• Carshare BE = 8,200 miles• Rideshare BE = 2,200 miles
• Public Transportation InterfaceHow are the first and last miles
• Technology Limits – Where does complexity overtake convenience
• Inflection Points – How will competition will react; when doesdemographic and urbanization trendsrun their course
Source: The Impact of New Mobility Services on the Auto Industry, CAR, August 2016
Creating the New Value Model
• Individual v. Fleet
• Utilization cycles
• Absolute levels
VMT – Levels and
Ownership
• Reliability and durability requirements
• Replacement cycles
• Distribution of system value
Vehicle
Design and Specification
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Autonomous Will Come “Bottom Up & Top Down”
Tesla“Autopilot 2.0” (Level 3 in 2017, with subsequent updates to higher levels)
Audi “Piloted Driving” (Level 3)
Honda“Automated HW Driving” (Level 3?)
Nissan “Autonomous Drive” (Level 3?)
Lyft/GM Automated Taxis (Level 4)
Mercedes “Autonomous Drive” (Level 4)
Volvo“DriveMe” Deployment(Level 3? 4?)
Volvo“DriveME” Pilot(Level 3)
FordAutomated Ridesharing (Level 4)
BMW“Highly/Fully Autonomous”(Level 4? 5?)
UberAutonomous Taxis(Level 4)
Source: Center for Automotive Research
The Industry May Be Rocked By Disintermediation (Yes, a Loose Use in Its Pure Form)
Disintermediation, the process of removing intermediaries from a supply chain, a transaction, or, more broadly, any set of social, economic, or political relations.
Encyclopedia Britannica
• OEMs – powertrain value, if not the vehicle design itself (how much vertical integration is needed in an EV world and will crowd design take hold?)
• Suppliers – systems integration and value creation one more level removed (will current first tiers concede leverage to software, AI and integrated chip suppliers?)
• Dealerships – the transaction, if not the dealership itself (is COSTCO, Amazon and TESLA bigger than the NADA lobby?)
• Fuels – fueling stations, if not the fuel itself (will plugging-in get the consumer right to the “refinery?”)
• Services – truly all pay for play (will digitization allow consumers to pay for true use of mobility, insurance, streaming services, and the like?)
In Conclusion:
It Will Be a Brave, New World• With the cycle/revenues flattening out it will be a game of:
– vehicle/content mix
– manufacturing cost containment
– capital/R&D investment off of current low cost of capital and cash reserves
• With disintermediation capital intensity will move changing ownership structures and business valuation models
• New mobility services forecast models do not incorporate legacy players responses
• Clock speed of technology cycles and market fragmentation will come sooner and harder to all players
• Regulation and public policy is being created simultaneously with the commercialization of new product and services creating uncertain rules of engagement
Guest Presentations
• Thomas Klier - Senior Economist, Federal Reserve Bank of Chicago
• Sue Yingzi Su - Senior Economist, General Motors
• Jeff Schuster - Senior Vice President, Global Forecasting - LMC
• Charles Chesbrough - Executive Director: Research, Analysis and Senior Economist | Original Equipment Suppliers Association (OESA)
Guest presentations reserved exclusively for CAR Affiliates and ACP members
Understanding Mexico’s
growing role in North
America’s
vehicle production
ACP meeting
Detroit, MI
January 12, 2017Thomas Klier
Senior EconomistFederal Reserve Bank of Chicago
Disclaimer
The analysis and conclusions set forth are those of the authors and do not indicate concurrence
by other members of the research staff or the Federal Reserve Bank of Chicago
Global automotive industry Outlook
Sue Yingzi Su
Senior Economist
January 12th, 2016
www.lmc-auto.com© 2016 LMC Automotive Limited, All Rights Reserved.
Automotive Outlook:Where is the Industry Headed…Plateau?
Jeff Schuster - Senior Vice President, Global ForecastingJanuary 12th, 2017
Join. Engage. Advance.
Join. Engage. Advance.
SUPPLIERS’ MARKET OUTLOOK
Q1 2017
Charles ChesbroughExecutive Director: Research, Analysis and Senior Economist
Original Equipment Suppliers Association
Thank You
Enjoy the show!