KPMG’s Global
Automotive Executive
Survey 2014
Strategies for a fast
evolving market
Presented by:
Gavin Maile
March 2014
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
1
Welcome
Mr. Carel Smit
KPMG Executive Partner
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
2
KPMG’s Global Automotive Executive Survey 2014
Agenda
1. Global KPMG Survey Results
2. South Africa – Market, Growth & Trends
3. Panel discussion – Roadmap to Growth
4. Cocktails
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
3
KPMG’s Global Automotive Executive Survey 2014
Agenda
1. Global KPMG Survey Results
2. South Africa – Market, Growth & Trends
3. Panel discussion – Roadmap to growth
4. Cocktails
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
4
KPMG’s Global Automotive Executive Survey 2014
About the study
About the study
Geographic distribution of respondents
Respondents job titles
Company category
Company annual revenues
■ KPMG International’s annual
assessment of the current
state and future prospects
of the worldwide automotive
industry.
■ In this year’s survey 200
senior executives from the
world’s leading automotive
companies were
interviewed.
Source: KPMG's Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
5
KPMG’s Global Automotive Executive Survey 2014
Content
Market and consumers: the bigger picture
Global forces shaping the sector
Evolving strategies for market success
Winners and losers in the battle for global dominance
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
6
Key automotive trends up to 2025
STANDARDIZATION
Increasing use of platforms and
standardization of modules
ICE OPTIMIZATION
Downsizing and optimization of the
internal combustion engine (ICE)
EMERGING MARKETS
78%
Market growth in
emerging markets
76%
85%
FUEL CELL E-MOBILITY
69%
EUROPEAN PRODUCTION
SELF-DRIVING CARS
MOBILITY
Mobility-as-a-service
Rationalization of production in
Europe and shifting of production
to emerging markets
61%
14%
49%
59%
49%
CONNECTIVITY
The industry
continues to be
shaped by
emerging markets.
57%
59%
Connected car technologies
(e.g. car-to-x communication)
BATTERY E-MOBILITY
FINANCE & LEASING
URBAN VEHICLE
OEM captive
financing and leasing
Innovative urban vehicle
design concepts
There is a sharp
decline in the
importance of pure
battery e-mobility
as automakers
continue to turn
their attention to
improving ICE
efficiency.
Note: Percentage of respondents that rated a trend as ‘extremely important’ or ‘very important’
Source: KPMG's Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
7
Markets and consumers - the bigger picture:
Consumers choose economy over innovation
Factors influencing consumer’s purchase decision
92%
79%
79%
74%
73%
Fuel efficiency
Safety innovation
Ergonomics and
comfort
Vehicle styling/
exterior
Environmental
friendliness
70%
69%
65%
53%
47%
Enhanced vehicle
lifespan
Plug-in solutions
Vehicle-bound
internet
connectivity and
built-in
technologies
Telematics/
personal
assistance
services
Use of alternative
fuel technologies
Consumers have
to choose
between their
conscience,
their wallet and
their status.
Connected car
solutions are
gaining
importance yearon-year.
Percentage of respondents that rated issues as ‘extremely important’ or ‘very important’
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
8
KPMG’s Global Automotive Executive Survey 2014
Content
Market and consumers: the bigger picture
Global forces shaping the sector
 Technology
 Urbanization
 Digitalization and self driving cars
 Transforming the dealership model
 Emerging markets
Evolving strategies for market success
Winners and losers in the battle for global dominance
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
9
Technology
A broad mix of competing powertrain technologies
Main investments in powertrain technologies over the next 5 years
16%
Plug-in
hybrid fuel
systems
11%
Hybrid fuel
systems
46%
ICE downsizing
and optimization
8% Battery
electrified
vehicles
with range
extender
10%
ICE downsizing assumes a
higher priority, while plug-in
hybrids are expected to be the
most popular e-mobile and set
to lead the e-vehicle race.
Electric vehicle technology attracting the most consumer
demand by 2019
Fuel cell
electrical
PLUG-IN HYBRIDS
vehicles
9%
Pure battery
35%
electrified
vehicles
24%
Note: Percentage of respondents that chose the technology they plan to invest
the most in. Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
17%
12% 14%
NON-PLUG-IN HYBRIDS
(FULL/MILD/MICRO)
FUEL CELL ELECTRICAL
VEHICLES
BATTERY ELECTRIFIED
VEHICLES WITH RANGE
EXTENDER
BATTERY ELECTRIFIED
VEHICLES
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
10
Urbanization:
The changing shape of mobility in tomorrow’s cities
Proportion of consumers that need to own a car (by age group)
Almost half of
executives believe
that those under
25 need to possess
their own car, while
54 percent believe
over-50s do also.
< 25 years
25 – 35 years
35 – 50 years
> 50 years
Note: Percentage of respondents that rated their answer as ‘extremely important’ or ‘very important’
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
11
Urbanization:
OEMs could become pure mobility solution providers
When will mobility solutions become an important source of profit
Mobility solutions
are already a
source of profit
In 5 years
In 10 years
In more than
10 years
One in seven
respondents say
mobility solutions
are already delivering
positive margins, and
a further 31 percent
expect profits
within 5 years.
Note: Percentage of respondents that chose the respective answer
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
12
Digitalization and Self-driving vehicles:
Cooperation the key to self-driving car development
Self-driving vehicles on public reads
Expectations for
driver-free vehicles
are considerably
higher in the BRICs
than in the TRIADs.
With in 5 years
5–10
years
10–20 years
> 20 years
Never
Note: Percentage of respondents that chose the respective answer
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
13
Transforming the dealership model:
Factors influencing consumers’ purchase decisions
COMPETITIVE FINANCING OPTIONS
83%
BRAND
WARRANTY OPTIONS
80%
84%
80%
E-COMPONENT FINANCING
78%
Financing of e-components (if applicable)
43%
50%
QUALITY SERVICE
EXPERIENCE
During the purchase transaction
SERVICING OPTIONS
During the vehicle lifespan
60%
RESPONSIVENESS TO
PRODUCT RECALLS
Quick and conscientious
responses to product recalls
RECOMMENDATIONS
78 percent of
BRIC respondents
feel competitive
financing
influences
the consumer
purchase
decision;
this could signal
an opportunity
for establishing
global financing
operations.
On the internet/social media
Note: Percentage of respondents that rated each topic as ‘extremely important’ or ‘very important’
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
14
Transforming the dealership model:
Strategies for future success for retailers/dealers
SERVICE STATION
67%
62%
53%
46%
E.g. bank, insurance,
update services
PRODUCT TOUCH POINT
For internet services
CONVENTIONAL RETAILERS
50%
Almost half of the
respondents
believe that
conventional
models
are inappropriate.
CAR RENTAL AND SHARING POOLS
CHANGE BUSINESS
Totally the survive
Note: Percentage of respondents that rated the answer as ‘extremely important’ or ‘very important’
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
15
Transforming the dealership model:
The rise of the online dealership model
Non dealers
Importance of different dealership models for future success
63%
44%
39%
Online dealerships
and intermediaries
Multi-brand
dealerships owned
by third parties
Dealerships will be
independent
Dealerships will be
integrated into the
OEM business
60%
60%
55%
30%
Dealers
72%
Online dealerships
are set to rise
significantly but
dealers themselves
are less optimistic
about it.
Note: Percentage of respondents expecting the importance of each concept to increase
Percentage of respondents expecting importance of the respective concept to remain stable or decrease are not shown.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
16
Transforming the dealership model:
Market maturity brings a greater focus on efficiency
Factors influencing dealer profitability
LOCATION
Good dealership locations
BRAND
95%
Brand performance and multi-branding
95%
95%
FINANCING COSTS AND
EQUITY STRUCTURE
90%
75%
75%
80%
CONTROLLING AND
MANAGEMENT SYSTEM
Effective controlling and dealer
management system
MANAGING PRICING
AND SUPPLY
ORGANIZATIONAL STRUCTURE
Motivational organizational
structure and sales incentives
BRIC dealers
place a growing
emphasis upon
brand performance
and multi-branding;
they also want to
improve their cost
and working capital
management, to
build sustainable
profitability.
COST AND WORKING CAPITAL MANAGEMENT
Note: Percentage of dealer respondents that rated the respective answer as ‘extremely important’ or ‘very important’
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
17
Emerging markets:
Where automakers plan to invest
TRIAD
Where automakers plan to invest
59%
40%
44%
30%
26%
19%
11%
8%
9%
China
India
Brazil
Russia
South
Africa
Turkey
Indonesia
Vietnam
Colombia
Egypt
73%
65%
58%
55%
43%
34%
34%
31%
26%
26%
BRIC
64%
Note: Percentage of respondents that plan to ‘begin’ or ‘increase’ their investment in each country
Source: KPMG’s Global Automotive Executive Survey 2014.
BRIC automakers are more likely than their TRIAD peers to
raise their investment levels in every major emerging market.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
18
Emerging markets:
BRIC import restrictions starting to relax
Expected changes in market conditions and barriers
RUSSIA
CHINA
BRAZIL
INDIA
Note: Percentage of respondents expecting barriers to increase/remain stable/decrease
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
19
KPMG‘s Global Automotive Executive Survey 2014
Content
Market and consumers: the bigger picture
Global forces shaping the sector
Evolving strategies for market success
Winners and losers in the battle for global dominance
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
20
Evolving strategies for market success
Ranking
2014
Ranking
2013
Business strategy
Percentage
1
3
Organic growth
84%
2
2
Expansion of the value chain and
diversification
77%
3
1
Corporate partnerships
(JVs and partnerships)
77%
4
6
Cooperation with players from converging
industries
76%
5
4
Outsourcing of (non-)core activities
55%
6
5
Mergers and acquisitions
50%
Automakers are
refocusing from
joint ventures
and partnerships
towards
independent
growth.
Note: Percentage of respondents that rated the strategy as ‘extremely important’ or ‘very important’
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
21
Evolving strategies for market success:
Technology leadership is key to survival
Perceptions of leading automotive companies
RENAULT NISSAN GROUP
75%
25%
BMW
75%
26%
TESLA
74%
72%
VOLKSWAGEN GROUP
27%
29%
68%
32%
GENERAL MOTORS
68%
33%
TATA (INCL. JLR)
65%
36%
TOYOTA
64%
36%
HYUNDAI/KIA
64%
36%
BRILLIANCE-JINBEI
64%
37%
DONGFENG
63%
37%
57%
DAIMLER
43%
AVTOVAZ
56%
44%
HONDA
56%
45%
BYD
FORD
53%
47%
52%
Product/technology driven
Product/technology driven
CHERY
7 of the top 10
companies
considered to
be technology/
product
driven, are
from TRIAD
markets.
48%
Brand driven
Note: Percentage of respondents that consider each company to be product/technology driven or brand driven
Percentages may not add up to 100 due to rounding.
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
22
Evolving strategies for market success:
A small proportion are likely to retain their independence
Expected strategies for survival
BMW
78%
VOLKSWAGEN GROUP
12%
73%
TESLA
19%
61%
HYUNDAI/KIA
24%
37%
54%
TATA (INCL. JLR)
38%
52%
CHERY
35%
48%
NISSAN
SAIC
44%
RENAULT
43%
33%
8%
9%
14%
17%
36%
45%
8%
15%
56%
TOYOTA
10%
45%
11%
46%
11%
24%
DONGFENG
42%
37%
22%
FORD
42%
37%
22%
BYD
46%
39%
GENERAL MOTORS
39%
38%
DAIMLER
37%
BAIC
36%
Remain independent
Strengthen alliances
16%
24%
Strong
correlation
between
technological
leadership and
the ability to
remain
independent.
29%
35%
45%
20%
Merge with other OEMs
Note: Percentage of respondents believing that the company has to adopt this strategy in order to survive
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
23
KPMG‘s Global Automotive Executive Survey 2014
Content
Market and consumers: the bigger picture
Global forces shaping the sector
Evolving strategies for market success
Winners and losers in the battle for global dominance
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
24
Winners and losers in the battle for global dominance
Respondents expecting global market share to increase/decrease up to 2019
2014
2013
Company
Hyundai/ Kia
Country
1
5
2
1
3
21
AvtoVAZ
Russia
4
6
SAIC
China
5
13
Chery
China
6
11
Dongfeng
China
7
10
8
2
9
17
10
3
11
-
12
23
BYD
China
13
9
Nissan
Japan
14
7
FAW
China
15
12
Changan
China
16
8
Geely
China
Volkswagen Group
Tata (incl. JLR)
BMW
Brilliance-Jinbei
BAIC
Mahindra
Decrease
70%
-14%
South Korea
67%
-12%
Germany
66%
-10%
66%
-14%
65%
-20%
65%
-11%
65%
-17%
India
Germany
63%
-14%
China
59%
-16%
58%
-11%
China
India
Increase
55%
-20%
-16%
53%
52%
-23%
-16%
-21%
-22%
51%
51%
49%
Note: Percentage of respondents expecting market share to remain stable are not shown.
Source: KPMG’s Global Automotive Executive Survey 2014.
7 of the top 10 companies increasing
market share are from the BRICs.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
25
KPMG’s Global Automotive Executive Survey 2014
Agenda
1. Global KPMG Survey Results
2. South Africa – Market, Growth & Trends
3. Panel discussion – Roadmap to growth
4. Cocktails
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
26
Total Global Sales – Millions of units
120
100
80
60
40
20
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Economist Intelligence Unit
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
27
2013 Global Vehicle sales by OEM
5%
6%
5.60%
5%
5%
5%
4.90%
6.40
6.00
3%
3%
3.82
2%
2.82
4.00
4%
5.10
Millions of units
8.00
6%
9.50
9.71
10.00
7%
9.98
12.00
1.46
1.96
2%
2.00
0.00
1%
0%
Toyota
*e = estimate
3%
GM
VW
Ford(*e)
2013 Global Vehicle Sales
Nissan
Honda
Peugeot
Citroen
BMW
MercedesBenz
2013 Growth %
Source: Various
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
28
Global Sales by Region – Total Market (Millions of units)
50
45
40
35
30
25
20
15
10
5
0
'95
'96
'97
'98
'99
'00
'01
North America
'02
'03
'04
'05
Western Europe
'06
'07
'08
'09
'10
Asia & Australasia
'11
'12
'13f
'14
'15
'16
'17
Latin America
Source: Economist Intelligence Unit
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
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29
2013 Original Projections
Industry Body
Projections
Naamsa is predicting a 8.2% increase in total vehicle sales
(25/01/2013)
Retail Motor Industry Association CEO, Jeff Osborne expects the new
vehicle market to grow by a 8%
2013 Actual
(22/01/2013)
Business Monitor International (BMI) is forecasting a 7.8% increase in
sales to reach 672,680 units
650 620units +3.2%
(1/2013)
Wessel Steffens, head of ABSA Vehicle & Commercial Asset Finance
expects new vehicle sales growth of 5% in 2013.
(02/2013)
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30
2013 Industry Performance
Performance Summary
% of
best year
Total vehicle unit sales (incl. nonNaamsa)
650 620(+3%)
91%
Total passenger vehicle sales
450 440(+2%)
94%
Total domestic production
550 000(+2%)
94%
Total vehicle exports
275 822(-1%)
97%
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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31
2014 Projections
Industry Body
Projections
Naamsa is predicting a 1% increase in total vehicle sales = flat
(27/01/2013)
Wesbank expects total vehicle sales to reduce by 0.6% to 646 233
units for 2014.
(22/01/2013)
Sydney Soundy expects a 2% increase
(1/2013)
Dr Azar Jammine expects vehicle sales to be flat
(02/2013)
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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32
Total market sales – units by category
800
714
700
676
650
652
631
617
600
572
533
000's
493
482
500
482
421
420
400
450
399
383
400
363
328
326
300
273
337
329
268
256
235
396
395
382
355
351
450
443
435
258
258
252
234
242
214
204
199
200
131
133
160
169
170
149
169
170
132
118
103
100
118
108
107
134
118
107
100
33
13
13
14
15
13
17
14
12
12
21
35
37
27
22
19
27
28
32
31
0
'95
'96
'97
'98
'99
'00
'01
Total market
'02
'03
'04
Passenger
'05
'06
'07
LCV
'08
'09
'10
'11
'12
'13
14f
M&HCV
Source: NAAMSA
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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33
Total Market Sales – Passenger cars by source
400
80%
73%
69%
71%
350
75%
74%
70%
61%
61%
66%
58%
300
60%
62% 63%
54%
55%
51%
47%
250
50%
43%
50%
40%
38%
200
40%
335
322
272
26%
30%
25% 25%
25%
223
115
113
114
120
20%
125
164
125
28%
94
170
29%
204
266
215
200
127
176
27%
30%
82
172
163
78
62
54
60
52
42
22
9%
80
50
32%
26%
172
15%
160
19%
175
216
232
234
100
25%
26%
34%
265
32%
32%
211
209
150
36%
32%
337
39%
0
10%
0%
'95
'96
'97
'98
'99
'00
'01
Locally produced & sold
'02
'03
'04
Imports
'05
'06
'07
'08
% imports of sales
'09
'10
'11
'12
'13
'14f
Import duty rates
Source: NAAMSA
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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34
South African Sales – change by segment
40%
31%
30%
28.0%
23.0%
20%
17.0%
11%
14%
12%
10%
'96
2.4%
1.0%
'97
'98
'99 -3.0%'00
'01
6%
5%
1.0%
0%
-10%
9.0%
9.0%
'02
'03
'04
'05
'06
4% 2%
'09
'08
'07
10%
'10
'11
'12
'13
3%
14f
-9.0%
-12.0% -12.0%
-17.0%
-20%
-30%
-30%
-40%
-50%
Passenger cars
LCV
M/HCV
Source: NAAMSA
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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35
Total vehicle production & exports - units
60%
800 000
54%
51%
50%
50%
51%
51%
51%
700 000
27%
32%
24%
609 000
545 913
546 074
532 545
562 965
472 049
421 965
406 779
19%
31%
600 000
500 000
400 000
373 923
18%
356 800
326 722
20%
311 633
362 316
386 302
389 392
27%
405 071
30%
30%
525 227
31%
455 702
40%
534 490
587 719
47%
300 000
200 000
'95
'96
'97
331 400
276 378
277 893
272 457
239 465
174 947
284 211
171 237
179 854
139 912
110 507
126 661
125 306
108 293
68 031
19 569
0%
25 896
5%
3%
11 553
4%
15 764
10%
59 716
8%
100 000
0
'98
'99
'00
'01
'02
Total vehicle production - units
'03
'04
'05
'06
'07
'08
Total vehicle exports - units
'09
'10
'11
'12
'13
14f
%Exports
Source: NAAMSA
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36
Production of vehicles by SA manufacturer – units
20 000
40831
32312
32 618
40 183
36 969
47 880
46 235
26 363
26 972
31 982
37 645
39 406
65 018
52337
62 339
58 321
34 919
34 600
24 570
48 818
57 032
40 000
56 367
43 768
53 629
49 381
61 297
47 189
60 000
12 820
80 000
62 328
100 000
50 300
36 627
46 602
49 243
52 908
43 161
66 087
Units
120 000
113 975
93 454
140 000
105 922
123 172
160 000
142 819
183 394
180 000
120 577
137 871
103 732
106 610
153 052
149 250
151 231
200 000
0
2007
2008
2009
2010
2011
2012
2013
Source: NAAMSA/RGTSMART
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37
Export of vehicles by SA manufacturers – total units
140 000
16 395
20 364
9 621
10 950
6 087
31813
33 904
20 000
20 479
13 156
37 594
31 759
38 913
36 415
49825
36 229
6 439
24 158
29 375
54148
52 098
76 877
81 169
36 071
35 633
39 874
29 385
40 049
38 523
39 621
37 814
38 206
41 886
33 297
54 197
38 207
29 057
40 000
55 598
62 704
60 000
59 378
49 142
80 000
20 660
Units
100 000
86 941
88 122
80 109
127 453
120 000
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: NAAMSA/RGTSMART
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38
40 763
39 865
41111
63 459
66220
50 000
43 688
55 433
60 000
62 886
70 000
58 370
64 954
Top export destinations (outside Africa) – total units
32 197
7060
8 362
5 121
1 846
2457
10 961
11 461
11558
13 549
13 389
14 975
5 069
10 000
7 210
8 612
14325
18 112
13 502
10 820
20 000
17226
22 475
14 275
21 348
21 540
30 000
24 869
31 195
Units
40 000
0
2008
2009
2010
2011
2012
2013
Source: NAAMSA
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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39
Top export destinations (into Africa) – total units
29 917
35 000
24281
30 000
2 389
2 451
2 715
5062
2 722
2 018
2 467
2 901
3586
4 496
1 426
2 078
2 930
3171
3 679
7783
7 570
1 146
1 758
3 182
3443
3 497
11 671
11 704
1 622
3 286
5 137
5167
4 368
5 000
2 745
934
1 935
10 000
9 225
7 151
15 000
14 440
11 757
Units
20 000
14874
24 191
25 000
0
2009
2010
2011
2012
2013
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Source: NAAMSA
40
Drivers of SA Production (Positive or Negative)
 Global & local economy – continued recovery and growth required.
 Manufacturers – input costs rising, globally competitive, reliability of supply.
 Labour – volatility, cost, productivity.
 Infrastructure – to support & facilitate growth (Electricity, Ports, Roads, water, rail).
 Legislation – APDP review & post 2020.
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41
Drivers of SA Sales (Positive or Negative)
 Interest Rates & credit availability / NCA
 Vehicle Pricing/ Affordability/ Incentives
 GDP/ Inflation/ Economy
 Exchange Rates & Volatility
 Employment/ Disposable income/ Confidence
 Replacement demand
 Tourism (rentals)
 Running costs (fuel, tolls)
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42
KPMG’s Global Automotive Executive Survey 2014
Agenda
1. Global KPMG Survey Results
2. South Africa – Market, Growth & Trends
3. Panel discussion – Roadmap to growth
4. Cocktails
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43
Robert Houdet
Executive Director
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44
Nico Vermeulen
Managing Director
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45
Jakkie Olivier
CEO
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46
Anna Theron
Director
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47
KPMG’s Global Automotive Executive Survey 2014
Agenda
1. Global KPMG Survey Results
2. South Africa – Market, Growth & Trends
3. Panel discussion – Roadmap to growth
4. Cocktails
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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48
Thank you
Presentation by:
Gavin Maile
Director
+27 83 253 7165
gavin.maile@kpmg.co.za
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KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
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49