Automotive industry
Facts and Figures
2014
Guido Nelissen
1
• “I’am...absolutely mesmerized by some of the double-digit
performances that i’ve seen coming out of the supplier base. And
unfortunately, when i see this, my blood pressure goes up”,
Marchionne, CEO FCA
• “The car has to adapt to what Apple is doing, to what Google is
doing, and that’s an uncomfortable situation and not one
automakers have been in, in the past”, Mr. Singh, Qualcomm
• “Luxury vehicles and trucks, including pickups and large SUV’s
account for 14% of global car sales but 60% of sector profits”, Dan
Ammann, President GM
• “European suppliers as Faurecia and Valeo have a five-to 10-year
window for above-average organic growth because of automotive
megatrends”, John Stanley, Automotive News Europe
2
1. Markets
• First increase in registrations since 2007: +5,7%
 Spain: +18%
 Stagnation in France
• Collapse of the Russian market: -35%
• Forecast: +3 to 4% in 2015
• Sales in the US plunged over 6,5m to 10m between 2007 and 2009,
but after 6 years of growth, they have reached the again the precrisis level of 17 m. (however what goes up, must go down
sometime...)
• Global light vehicle production will increase from 82,6m in 2014 to
105m in 2018
• Non-NAFTA vehicle imports in the US peaked at 26% in 2009 but
declined since to 21% nowadays, in large part thanks to expansion of
car production in Mexico (8 new assembly lines are expected to
come online in the country until 2020 representing 2m extracapacity)
3
New passenger car registrations by manufacturer
VW Group
Volkswagen
Audi
Skoda
Seat
others (Porsche)
PSA Group
Peugoet
Citroen
Renault Group
Renault
Dacia
FORD
Opel Group
Opel/Vauxhall
Chevrolet
Other GM
BMW Group
BMW
Mini
Units
Share
Units
Share
Units
Share %
%
08
08
13
13
14
14
14-13
14-08
3.072.210
20,8%
2.967.676
25
3.181.659
25,4
+7.2
3,6
1.573.811
10,7%
1.492.310
12,6
1.557.160
12,4
+4.3
-1,1
664.167
4,5%
665.703
5,6
697.946
5,6
+4.8
5,1
462.485
3,1%
485.526
4,1
554.479
4,4
+14.2
19,9
336.274
2,3%
280.196
2,4
318.956
2,5
+13.8
-5,1
35.473
0,2%
43.941
0,4
53.118
0,4
+20.9
49,7
1.863.757
12,6%
1.310.566
11
1.358.630
10,8
+3.7
-27,1
1.006.887
6,8%
722.851
6,1
764.687
6,1
+5.8
-24,1
856.870
5,8%
587.715
4,9
593.943
4,7
+1.1
-30,7
1.285.946
8,7%
1.078.516
9,1
1.222.377
9,7
+13.3
-4,9
1.103.277
7,5%
788.721
6,6
863.236
6,9
+9.4
-21,8
182.669
1,2%
289.795
2,4
359.141
2,9
+23.9
96,6
1.232.952
8,4%
877.056
7,4
927.861
7,4
+5.8
-24,7
1.348.583
9,1%
945.704
8
905.444
7,2
-4.3
-32,9
1.155.406
7,8%
806.981
6,8
869.154
6,9
+7.7
-24,8
187.352
1,3%
138.469
1,2
36.128
0,3
-73.9
-80,7
5.825
0,0%
254
0
162
0
-36.2
-97,2
821745
5,6%
761.677
6,4
797.058
6,3
+4.6
-3,0
677.489
4,6%
613.885
5,2
645.559
5,1
+5.2
-4,7
4
143.991
1,0%
147.792
1,2
151.499
1,2
+2.5
5,2
Fiat
1.182.999
Fiat
959.599
Lancia/Chrysler
144.857
Alfa Romeo
102.344
Jeep
36.649
DAIMLER
790092
Mercedes
686.206
Smart
103.886
Toyota Group
783803
Toyota
783.803
Lexus
29.744
Nissan
337.285
Hyundai
271.429
KIA
234.510
Volvo Car Corp
223.641
Mazda
244.330
Suzuki
249.518
Land Rover
72.976
Jaguar
36.822
Honda
265.251
Mitsubishi
117.404
Saab
64.301
other (Subaru, China) 75.439
TOTAL
14.739.999
8,0%
6,5%
1,0%
0,7%
0,2%
5,4%
4,7%
0,7%
5,3%
5,3%
0,2%
2,3%
1,8%
1,6%
1,5%
1,7%
1,7%
0,5%
0,2%
1,8%
0,8%
0,4%
0,5%
100,0%
798231
563.299
73.934
62.366
22.207
658.546
594.876
63.670
512.698
490.050
22.648
407.661
407.668
330.619
210.369
133.761
141.658
105.281
26.523
131.760
71.645
91
74.759
11.879.573
4,7
3,8%
0,6
0,5
0,2
5,5
5,5
0,5
4,3
4,1
0,2
3,4
3,4
2,8
1,8
1,1
1,2
0,9
0,2
1,1
0,6
0,0%
0,6
743.100
576.860
71.341
57.009
37.890
681.661
627.718
53.943
527.914
498.443
29.471
462.257
410.631
343.724
236.263
161.035
151.315
112.208
28.072
126.528
93.480
4,6
3,9%
0,6
0,5
0,3
5,4
5
0,4
4,2
4
0,2
3,7
3,3
2,7
1,9
1,3
1,2
0,9
0,2
1
0,7
+2.4
+2.4
-3.5
-8.6
-+70.6
+3.5
+5.5
-15.3
+3.0
+1.7
+30.1
+13.4
+0.7
+4.0
+12.3
+20.4
+6.8
+6.6
+5.8
-4.0
+30.5
72.306
12.550.771
0,6
-3.3
+5.7
-37,2
-39,9
-50,8
-44,3
3,4
-13,7
-8,5
-48,1
-32,6
-36,4
-0,9
37,1
51,3
46,6
5,6
-34,1
-39,4
53,8
-23,8
-52,3
-20,4
-100,0
-4,2
5
-14,9
2. Strategic alliances
• ZF (9th) acquired TRW (9th)to create the global No.2 (behind
Bosch but surpassing Denso) for about $11-12bn
ZF (Friedrichshaven): powertrains and chassis,
TRW (Michigan): world’s biggest car-safety equipment supplier
(airbags, collision sensors, braking-and steering equipment)
As part of the agreement Bosch will take over the 50% share of ZF in
their joint-venture for steering systems (expected antitrust issues)
Rationale:
• The deal bring together under one roof all the technologies needed to have a
fully automated vehicle
• ZF wants a bigger foothold in the market for self-driving and connected cars
6
7
• Strategic alliance Nissan-Mercedes
 since 2010
•
•
•
•
Small cross-shareholdings
Joint development and manufacturing of componets
Twingo and Smart are build on the same platform
Citan Van is built with Renault
A new joint-venture will be set up in Aguascalientes Mexico (where
Nissan has already a plant) with a capacity of 300,000 vehicles
(subcompact, start in 2017). Both partners will also collaborate on
advanced research, design of premium compact vehicles
• Daimler will sell it’s 4% stake in Tesla (in 2009 it took a stake of
9,1% but as a result of capital increases this was watered
down).
8
• new owner of Saab, National Electric Vehicle Sweden (owned
by National Modern Energy (a Chinese renewable power-plant
builder) sought protection from its creditors as it failed to
deliver on a objective to produce 120.000 cars. Probably
India’s Mahindra will buy NEVS.
• Mahindra will buy 51% of Peugeot Scooters in order to support
the international expansion of the struggling twowheeler
businesses of both groups
Mahindra acquires technology and design from PSA
PSA Scooters is already making losses for 10 years
• European market lost 45% of sales since 2007
• although small scooters have been outsourced
to Chinese Qingqi in 2007)
9
3. Social
• Volvo Trucks: -4,400 globally of which 1,300 with Renault Trucks in
France (of which 800 consultants and 500 open-ended contracts)
• PSA: -3,450 in 2015 (1,500 early retirements, 1,400 transfers to new
positions, 550 buy-outs) but also creation of 2,000 apprenticeships
• AvtoVAZ:
 - 7.500 in 2014
 from 55,000 to 30,000 by 2020 mainly white collars (“there are situations
when we have managers who only manage one person”)
• 5 bn. Cost savings plan with VW, 2 bn. With Audi
 Externalisation components (transmissions Kassel?)
 Ceasing unprofitable models?
• GM St.Petersburg: from 3 to 2 shifts (500 redundancies on 2,000
workers
• Ford Craiova (B-Max minivan): -680
10
• Honda Swindon: elimination of 1 production line and cutting
750 jobs in two restructurings (Honda Europe is lossmaking
since 2007)
• Dealerships have fallen by 12% to 47.500 in western Europe
since 2007 (-24% in Spain)
11
• Volvo Gent: insourcing of Johnson Controls Interior (180 empl.)
and DSV (pre-assembly and warehousing, 600 empl.) as part of
a strategy for a more age-related HMR policy
• The new flagship XC90 SUV Volvo will be built in Torslanda and
add 1,300 jobs (which increases total employment to 4,600)
• Bittersweet: Ford Valencia
Capacity +40% to 400,000 (2000 cars per day)
Since 2013 it added 3000 jobs to 8000
6 models
Relocation from Ford Genk
12
Employment
NACE_R2 Manufacture of motor vehicles, trailers and semi-trailers
NA_ITEM Employees domestic concept
2004
Belgium
2008
2009
2010
2011
2012
2013
2008/12
52,50
45,50
39,10
37,20
36,30
36,70
36,70
Czech Republic118,49
159,84
142,72
143,90
160,69
158,33
159,91
Germany (until 1990
858,00
former825,00
territory of 796,00
the FRG)
777,00
794,00
821,00 :
Spain
220,60
172,30
151,80
147,50
146,90
142,30 :
France
184,00
162,00
149,00
138,00
130,00
129,00 :
Italy
188,20
190,10
181,20
175,20
173,80
169,80 :
Hungary
67,74
83,23
71,91
78,94
98,00
97,74
104,80
Netherlands
24,00
23,00
21,00
19,00
19,00
19,00
19,00
Austria
34,58
34,36
31,01
29,67
31,13
32,75
31,48
Poland
211,91
245,20
220,30
202,10
208,70
212,30
225,90
Romania
98,90
103,60
139,10
111,40
136,40
131,00 :
Slovenia
10,70
14,40
12,88
12,84
12,94
13,28
12,92
Slovakia
36,77
57,68
49,27
51,32
57,72
61,69
61,16
Sweden
UK (1)
85
79
66
71
66
296
273
268
259
251
265
2.503,33
2.487,23
2.288,02
2.262,41
2.342,59
2.370,50
TOTAL
(1) Full transpôrt sector
13
255
-19%
-1%
0%
-17%
-20%
-11%
17%
-17%
-5%
-13%
26%
-8%
7%
-17%
-3%
-5%
4. Company strategies
14
FCA
• FCA quoted at NYSE since October, HQ in UK and registration in the
Netherlands: final step in the conversion of a Italian small-car
company into a US focused manufacturer powered by 4x4s and pickup trucks
 ambition is to increase sales by more than 50% to 7m by 2018
 By launching 30 new models (48 bn investment plan)
 By bringing Alfa, Jeep and Maserati to the emerging markets
 By reviving struggling Chrysler marque in the US and quadrupling sales of
Alfa (re-entry on the US markets)
• Supported by a rebound in SUV’s and pick-ups in the US
• But Fiat is carrying about 10 bn net debt (and 8 bn pension
obligations)
• Will sell its remaining shares (6% in total) in CNH to US investors for
about 602m EUR
15
• Spin-off of Ferrari
10% of the shares will be sold to the public by mid-2015
Remainder of FCA’s 90 per cent stake will be handed over to the
group’s shareholders
Estimates of the value of Ferrari range between 5bn to 12bn
16
Mercedes
• Overhaul of its manufacturing operations
Moving away from a manufacturing network
controlled by individual factories to a leaner system
centered around vehicle architectures and model lines
Individual plants will no longer operate autonomously
but production will be organized according to product
architectures, independent of locations
Four senior managers (for each of the brand’s
architectures) will replace the individual plant
directors
17
Renault
• Increase of production in France from 510.000 (2013) to
710,000 in 2016
 new models for Douai (Espace, Laguna), Sandouville (Trafic) and
Flins (Nissan Micra)
 this will create 750/1,000 extra-jobs (open-ended contracts), after
having reduced employment with 8,200
• “convergence plan” for closer integration of engineering,
manufacturing, purchasing and human resources
By 2020 70% of vehicles to be built on 3 platforms (Common Module
Family, CMF)
Synergies will increase from 2,8bn in 2013 to 4,3bn in 2016
18
PSA
• China has become its biggest market with ¼ of its volume
• Construction of 4th assembly plant in China has started in Wuhan
(360.000 vehicles). Dongfeng Peugeot has already 3 plants in Wuhan
(600.000 cars a year). PSA has also a jv with Chongqing Changan
Automobile (in Shenzhen, 200.000 vehicles)
• Component sourcing from low-cost countries will be doubled to 40%
• PSA will set-up a R&D center in Casablanca (the center will be run
jointly with consultant Altran) first step for low-cost production in
the country?
• Start of production of CKD kits in Kazakhstan
• Production in Poissy will be reduced to a single line as the C3 will be
produced in Slovakia. Poissy (Peugeot 208 and DS3 subcompact) will
produce a new compact vehicle in 2018 which will safeguard the
future of the plant
19
Ford
• Profit forecasts for the EU pushed back from next year until
after 2015
• The first aluminium-bodied F150 pick-up truck drove off the
production line in Dearborn which should reduce weight by
13% and fuel consumption by between 5 and 20%
• F-series stand for 90% of Ford’s global profit in recent years
20
Volvo
• Unveiled its first new model under Chinese ownership, the XC90, a make-or-break model as Volvo had to become
independent from platforms, engines and components from
Ford: a new architecture (SPA, Scalable Product Architecture),
a new powertrain, new vehicle and new electrification
• The XC90 should boost sales in the US and China (both 61,000
with a decline of 50% in the US in the last decade)
• The car will be built in Sweden
• Next up for a complete refresh is the S90
• Chinese-built S60L will be shipped to the US
• Volvo wants to increase sales from 428,000 in 2013 to 800,000
by 2020
21
Components
• Visteon is considering a plan to split the company into 2, one
focused on electronics (and connected car technology) and the
other on climate controls
 It will sell its 70% in a Korean climate controls joint-venture to Hahn
& Co, a Korean private equity fund and to tyremaker Hankook.
• Also Federal Mogul will split its retail replacement parts from
its engine parts division
• These deals show a continued move away from being supplier
conglomerates and towards auto technologies
22
Regions
23
China
• In 2013 GM reported $3,7 bn net income by its Chinese jointventures (against $3,8 bn. Overall net income)
China accounts for 1/3 of VW’s and GM’s vehicle sales
GM will open 5 new assembly plants
• In 2013 VW reported €9,6 bn operating profits in China
compared with €11,7 bn worldwide
• Qoros, set up in 2007 by Chery and Israel Corporation (now
Singapore based Kendon), entered the European market
(Slovakia)
• JLR’s first China factory was opened in Changsu and will
produce the Range Rover Evoque and a Jaguar saloon (from
2016). The plant with a capacity of 130,000 is a jv with stateowned Chery
24
Russia
• Slump in Russia: sales -16% in 2014, -35% in 2015?
• Weaker ruble (-40%) undermines carmakers that import most
of their parts
• GM, Audi and JLR temporarily stopped selling cars
• Ford writes off all the equity in its jv called Sollers ($329m)
25
Technology
Hybrid Air technology PSA
26
Electrical Powertrains
• Sales EV: from 31,615 in 2013 to 53,000 in 2014. Nissan Leaf is
market leader followed by Tesla S, BMW i3 and Renault Zo
• Probably plug-in hybrids will overtake the electric vehicles in
2015 (Mitsubishi Outlander, BMW i3 and Volvo V60)
• GM will discontinue Ampera (a rebadged Volt and Car of the
Year in 2012) after the redesign of the latter in 2016
• Market for lithium batteries dominated by Panasonic (36%)
and Automotive Energy Supply Corp. (a joint-benture between
Nissan and NEC) while US battery makers as Ener1 and A123
Systems filed for bankruptcy
• PSA will discontinue its Hybrid Air technology
27
GM Bolt: Complete shake-up of the EV market?
28
Hydrogen
• Toyota launched the first hydrogen-powered car on the mass
market, the Mirai (66,000 EUR without subsidies and tax
credits)
• Also Hyundai started leasing a fuel-cell car in California
• Honda will enter the market of hydrogen cars in 2016
• Followed in 2017 by Nissan/Daimler/Ford (alliance)
• But the cars will be sold at a loss, only by 2025 the hydrogen
cars will be commercially viable for mass use
• By 2020 (Tokyo Olympics) Toyota aims to launch the next
generation at a much lower cost (1/3 -1/4) thanks to reengineering the fuel cell and reducing drastically the use of
expensive precious metals)
29
Self-driving cars
• Combination of radars, (infrared) cameras, sensors and powerful, high-speed (real
time) computers, big data
• Together with
 Adaptive cruise control
 Advanced mapping
 Collision avoidance systems
 automatic steering (lane changing)
 Vehicle-to-vehicle communication by wireless transponders
 Strong back-up systems to guarantee safety
• Technological disruption, new paradigm
 Cars belong to the evolution of the ‘internet of things’: highly sophisticated autonomous and
connected mobile computers
 Value added will shift to companies developing software and electronic content (like in the mobile
phone business)
 “the one that controls the brain (the operating system) will also control the value”
 So carmakers and suppliers will have to invest heavily in building their software capability, but also
standalone software companies will enter the sector
• Tipping point is near as long as the cars are designed to assist the driver
• For cars without steering wheel and pedals, there are still many roadblocks: legal,
infrastructure, technology, price
30
Roadmap for self-driving cars
• 2016: proliferation of driver assistance technology
• 2020: self-driving on highways: accelerating, braking and
changing lanes
• 2025: computer-controlled driving (with the driver able to take
control and override autonomous functions)
• ?: fully driverless cars
31
Platform strategy
• Move to megaplatforms
 Enormous economies of scale
 Lower development costs
 Faster times to market
 Ability to build multiple cars on one line
• VW has a substantial head start by shifting from integral to modular
platforms (“toolkits”) which enables to vary the basic dimensions of a car
built off a specific platform
 The MQB platform will underpin 6m cars and 40 models with different
wheelbases, track widths, wheel sizes and seat positions
 VW invests 50 bn in development costs and capital expenditure to launch MQB
 But so far MQB hasn’t delivered the expected savings VW has been hoping for
• Renault-Nissan is closest to achieving VW’s scale: by 2020 it will have 70%
of its cars built on 3 platforms (with 3,5m cars built on the CMF B (the
common module family including the Clio
• PSA: from 7 to 2 in 2022. Its new Efficient Modular Platform EMP2 will built
11 models and 1,5m cars by 2018
• GM: from 14 in 2015 to 4 in 2025
32
Environment
• Fiat and BMW (currently at 133g) will not hit the new CO2 cap
until 2022 and 2024 respectively (facing a fine of 95 EUR for
every extra gram that each new car emits)
• Also Suzuki, Hyundai, Mazda and Honda risk to miss the
targets
• CO2-emissions from new cars per country
Germany: 136 (highest after Poland 138)
Lowest: Netherlands: 109, Greece, 112
Resulting from diffences in car tax systems
• US: near doubling fuel efficiency from 27,5 miles per gallon in
2012 to 54,5 mpg in 2025 average fuel
33
Regulation
• European Commission sent formal charge sheets to Daimler,
Volvo, MAN, CNH Industrial for alleged price-fixing (during 14
years they set up a cartel to agree on the timing and price
increases for the introduction of new emission technologies)
• 14 carmakers are fined $420 (2% of revenue) in India for
stiffling competition in the market for spare parts: “arbitrary
and high prices for their spare parts” and “distorting fair
competition by using their dominant position to protect their
market for repair services”
34
• Audi ($41m.) and Chrysler have been found guilty for “vertical”
infractions on the Chinese Anti-Monopoly law: fixing the retail
prices charged by their downstream dealers for spare parts
and repair services
• Also BMW and Mercedes are under investigation, they
responded with huge price cuts on their components
• Also 12 Japanese car parts suppliers were accused and fined
($202m, the biggest anti-trust fine ever in China) for
“horizontal” infractions (collusion between competitors to set
pricing levels for their components)
35
Miscellaneous
• Former Porsche CEO Wiedeking(together with CFO Härter) must
stand trial over the company’s failed bid to use options to acquire
VW (2008)
 Porsche secretly began acquiring options to buy VW shares in 2008 but
dismissed speculation that its ambition was to acquire a 75% stake (=full
control)
 Porsche finally acquired 74% , as a result there was a lack of VW shares on
the market
 When Porsche’s options position was revealed in October 2008, VW’s stock
surged to record highs as short sellers raced to buy shares to repay their
borrowed shares (as they were betting that VW’s share would drop)
 Hedge funds have sued Porsche for more than 5bn. Claiming that Porsche
didn’t disclose the ownership of the package (or about its accumulation of
options on VW shares (market manipulation)
 Porsche’s failed takeover attempt left it with a big debt pile that pushed it to
the brink of bankruptcy
36
• GM has issued 75 recalls covering 30m vehicles in 2014 with
defects of various kinds (it recorded $2,5 bn. Charges in the
first two quarters)
Defective ignition switches have been linked to 30 deaths
• Defective airbags (4 fatalities) made by Takata sparks recall of
17m vehicles across the world
37
• VW plant in Chattanooga established a “Community
Organization Engagement” granting eligible labour groups
three levels of access and dialogue with management
(tresholds 15, 30 and 45%)
This will give the UAW access to the company
But no mentioning of the right to collective bargaining
Recently VW recognized a second yellow union
38
Thank you for your attention!
Self driving car
With steering wheel and pedals
39
Self-driving car
without steering wheel and pedals