A new era:
Transformation in the Automotive Industry
Dr. Martin Hölz
Partner & Global Head of Automotive
8th December 2010, Istanbul
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
2
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The global automotive industry will not be the same as it has
been in the past 100 years...
Liquidity Crisis
Industry Restructuring
“New” Industry
2008-2009
2009-2010
Future
• Major capacity reductions
in NAFTA and Western
Europe
• Capital availability
improves
• Significant structural
changes
• Large-scale asset sales
• Re-sourcing to stronger
suppliers
• Strong balance sheets
lead consolidation
• Newly-consolidated global
OEMs and suppliers
• Government loans
• New players and
consolidators emerge,
especially in emerging
markets
• Bankruptcy and
restructurings
• Liquidations
3
A new era. Accelerating toward 2020 – An automotive industry transformed
• New companies born
from restructuring
• New business models
• Emergence of new
technologies for e-mobility
© 2009 Deloitte Touche Tohmatsu
The future of the automotive industry will have significantly
different characteristics
Traditional
• Vertically integrated structure
Future perspective
• Highly flexible, project-oriented
structure
• Sales channels are
monopolized by OEM’s
• Multi-channel & multi-brand approach
• High entry barriers for new
“players”
• New “players“ are established to
achieve new mobility concepts
• High capital requirement
• Still high capital requirement for
technology-innovation
• High dependencies
between suppliers & OEMs
• Increasing supplier autonomy and
power
• New generation of more environment
friendly vehicles
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
4
With the transformation to e-mobility there will be a significant
change in the value chain of the automotive industry
Value Chains
Conventional Vehicle
EV
Initiated by various players’
specialization
Initiated by automaker
integration
Affiliated
Importer /
Dealer
5
Affiliated
Importer /
Dealer
Automaker
C
Affiliated
Importer /
Dealer
R&D
Parts
Assembly
Automaker
B
Affiliated
Supplier
Manufacturing
Automaker
A
Affiliated
Supplier
Sales
Affiliated
Supplier
Independent Research Companies
(e.g. Engineering Companies
Independent Suppliers
(e.g. Battery, Motor, Inverter suppliers)
Automaker
A
Automaker
B
Automaker
C
Independent Multi-brand Dealers
Key Points
• Shift in profit allocation
from assembly to
information technology
and components
• New “players“ from
different industries such as
energy, IT and electronics
• Change from one-to-one
towards multi-multi
structure
• Lower entry barriers
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
6
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Most of the OEMs have already invested in different e-mobility
technologies
Manufacturer
Global Automobile Sales
(10.000 units in 2009)
Investment in Technology
Global Sales of over 2 M
Vehicles
Daimler
Dongfeng
BMW
Opel
Mazda
Mitsubishi
Daihatsu
Tata
BYD
FAW
New
Entrant
Toyota
GM
VW
Ford
Honda
PSA
Nissan
Hyundai
Renault
Suzuki
Fiat-Chrys.
Global Sales of
Less than 2 M
Vehicles
HV
7
pHV
EV
FCV
Bollore
Fisker
Th!nk
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The companies which already invested in e-mobility related
topics are leading in the customer preferences
Brand Preference (Example from Deloitte US-study)
% of people
Question: From whom would you be most likely to purchase an EV?
18% 17%
15%
Companies with current models
16%
or models launching this year
14%
12%
12%
Other companies
10%
8% 7%
7%
8%
5% 5%
6%
4%
3% 3% 3% 2% 2%
4%
2% 2% 1%
1% 1% 1% 1% 0% 0%
2%
0%
Highlights
•
Car-buying is brand driven – trust is
important
•
Toyota, Honda, and Ford have a higher
likelihood of success in e-mobility
•
Toyota, Honda, and Ford have a high
green brand equity from hybrid sales
•
Nissan and Chevrolet will face
challenges due to the burden of
educating consumers
8
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
New comers from different industries have already started to
enter the car-manufacturing business
• Tesla Motors Case in Silicon Valley
‒ Managed by founder of an IT venture-company
‒ Hires talent from the aerospace and IT industry
Main Components are Procured
Japanese
manufacturer
Battery
Taiwanese
companies
Motor
Inverter
ASSEMBLY
Tesla Roadster
18650 type
• New Chinese Entrants (Baoya, Shifeng, etc.)
9
Baoya EV
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Alliances with companies from different industries against
new comers and threats will be another critical decision for
OEMs
Investors
Battery Comp.
OEM supply
Key Points
(Investment Ratio)
Toyota
Toyota
60%
Panasonic EV
Energy
• How to manage the threat
for lack of new
technological know-how
(Plan)
40%
Panasonic
Sanyo Electric
100%
Honda
Honda
49%
Blue Energy
GS Yuasa
Mitsubishi Motor
51%
51%
15%
(Plan)
Lithium Energy
Japan
Mitsubishi Motor
• In-house development vs.
strategic alliances with
suppliers, IT and
electronic companies
34%
Mitsubishi Corp.
Nissan
Nissan
51%
42%
Automotive
Energy Supply
NEC
• Strategies against new
comers from different
industries like electronics
& energy
7%
NEC - Tokin
10
Fuji Heavy
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
11
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The quite simple structure of EV’s and new business models
enable new players to enter the manufacturing of cars
• Case 1: Taiwan’s Hua-chuang Automobile Information Technical Center Co. Ltd.
developed its own EV without any support from traditional suppliers
‒ Procured key components from electronics manufacturers
‒ Adopted driving module control technology from a venture company in the US
• Case 2: China’s BYD Auto (former mobile phone battery manufacturer) built the
capacity to manufacture EVs
‒ Acquired an automobile and an inverter manufacturer
‒ Gathered motor technologies from Chongqing University
BYD E6
!
12
About 95% availability of the resources for battery manufacturing (esp. noble
earths as dysprosium, terbium) in China, which could lead to a significant
competitive advantage for Chinese battery suppliers
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
With “modularization-” and “plug-and-play-” concepts the role
and power of suppliers in the industry will significantly shift
• Definition of global standards enable “Modularization”
• Connectivity without calibration - “Plug-and-Play”
1. Supply to two or more automakers
2. Achieve economies of scale (similar to semiconductor industry)
3. Mega-suppliers would become profitable, while automakers producing relatively
small volumes of EVs would be less so
CPU
13
HDD
Graphic
s
Battery
Motor
Inverter
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
14
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Many countries have already set challenging goals for the
penetration of HV/EVs.
Goals for HV/EV Sales
Japan
China
Goals for the penetration of next generation automobiles (set by Ministry of Environment)
• 2020:
sell 2.3 M. vehicles (HV 1.45 /EV 0.51 M)
retain 13.5 M vehicles (HV 9.3 /EV 2 M)
• 2030
sell 2.9 M vehicles (HV 1.83/ EV 0.73 M)
retain 26.3 M vehicles (HV 17/ EV 6 M)
• 2012 :
retain 500 K HVs, 100 K EVs
• 2020 :
retain 18 M HVs, 4 M EVs
• Long Run: retain 70 M HVs, 50 M EVs
USA
• Plans for penetration of 1 M pHVs by 2015
EU
15
（Example）
• 2020 :
• 2020 :
Germany plans to penetrate 1 M pHVs
Ireland plans to penetrate 230 K Evs (10%)
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Many countries already heavily invested on e-mobility: More
than US $44 B.
R&D and Manufacturing
Support
Infrastructure and
system
Japan
Next-gen battery research and
development
• 2009 ~ 2015 / total 21 billion yen
China
Purchase incentive
863 Project
Ministry of Science and Technology
• Environmental car purchase
• FY06-08: 8.3 billion yen Development
assistance plan
support to build a finished car
• FY08-10: 6.2 billion yen Core
technology development support
•
The car green taxation system
• Next generation car / fuel
initiative
US
EU
•
16
EU Green Car Initiative project
• France: R&D assistance for driving
system and battery (FY09-/250 million
Euro )
• Germany: R&D assistance of pHV/EV
(FY09/115 million Euro)
•
UK: FY11-/Max of 5,000 pounds
France: Transfer to HV cars that
passes 10 years or more/FY08-/Max
of 5,000 Euro
• Germany: Transfer to low-emission
vehicle FY08-09 Max of 2500 Euro
Total of 5 billion Euro
•
Note: The data and information was collected and compiled using various external media resources
based on information available from around November 2008 to end of February
EU – Japan
Energy technology
development
workshop
• Experimental national city
power grid infrastructure
charging
• HV / EV development of
national standards
China – US
•
Car technology program / Hybrid
electric system department (every year/
165 million dollars)
• The next generation battery, EV
• PHV/EV purchase assistance plan
development, manufacturing, and proof
(FY11-/7500 dollar or less per unit)
experiment (FY09-/2.4 billion dollars)
• Low-interest loan for gas-snipper
production (FY09-/25 billion dollars)
Intergovernmental
cooperation
•
Maintenance is promoted
by the cooperation of the
state government and the
private company
(California:1 billion dollars
investment)
• Establishment of
clean energy
laboratory
•
UK: spend 20 million pounds
for infrastructure
• France: Experiment
execution of the charge
infrastructure maintenance
• Germany: Pilot Charging
Stations
Britain – China
• A joint research
concerning
electrification of the
car
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
17
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
With the changing preferences and new dynamics, e-mobility
will also play a critical role in the future urban transportation
E-vehicle sharing Case: LISELEC - La Rochelle, France
• 50 EV’s (Peugeot 106 and Citroën Saxo)
• 7 stations across the city
• Membership structure (Membership in Car clubs reached 100.000 in 2009)
Benefits
• User freedom
• Cheap
• Free parking
• Convenience
• Availability
• Reduce global warming
Station
• Less traffic
Other applications: Petit Renta in Japan, Car Clubs in the UK, Autolib in France
and EV-tests in Germany.
18
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Technological advancements will increase the appetite of
companies like Google, Microsoft, HP, etc. to invest in the
automotive industry
Vehicle conversion to social networks
•
•
•
19
Transportation Information
o
Traffic stream control
o
Pricing and payment systems
Lifelog Business
o
Understanding consumer behavior
o
Creation of new businesses
IT and electronics into the car
o
Web in the car
o
Car to car communication
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
20
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
One of the important challenge of the industry is overcoming
the barriers against mass adoption of new generation
vehicles...
Factors Driving Purchase
Factors Preventing Purchase
Question: What would be your main considerations
when purchasing an EV?
Low
Question: What is the top factor that would prevent
you from purchasing an EV (% of respondents)?
High
Vehicle price
Reliability
Cost to charge
Convenience to charge
Fuel costs
Gov. incentives
Style and appearance
Environmental impact
Foreign oil dependence
Option to lease battery
Larger vehicle availability
Popularity
Six Adoption Barriers
1
2
Familiarity
3
Brand
4
Range
5
Charging
Infrastructure
6
Price and
Ownership
Cost
Source: Deloitte Survey, Interviews and Analysis
21
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
Content
Introduction
Transformation in Automotive Industry
Success Factors for Manufacturers
Success Factors for Suppliers
Success Factors for Governments
Social System
Barriers on Mass Adoption
Conclusion
22
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
The strategies and policies on e-mobility need to be built
based on the needs and alignment of all parties in the
automotive value chain
Manufacturing
Strategy
Customer
Energy Policy
23
Manufacturer
& Supplier
Infrastructure
Automotive
Association
Regulations
Government
Incentives
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited
©2010 Deloitte Turkey. Member of Deloitte Touche Tohmatsu Limited