Outlook Global Automotive Industry Jonathon Poskitt, Director, Global Sales Forecasts TAYSAD Aftermarket Conference Istanbul, 25 May 2018
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Outline! Current global automotive environment! Trends and medium-term outlook! Long, long-term transformation
SAAR Development 110 Global Light Vehicle Selling Rate (mn/yr) 100 90 80 70 60 50 40 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4
Global Economic Outlook 2018 Global US Brazil Japan China Eurozone Gaining speed - pushing through 3% Stronger growth but uncertainty remains Fragile recovery Moderating but holding Managed slowdown Stable with downside risk! 2018 growth driven by US boost and emerging market recovery! All major economies in expansion, though slowdown taking place in many cases 5
Global LV Sales 2018 Out of the Gate 2018 LV sales: 97.5 mn, +2.3% from 2017 World 4% 2% 2% 16 17 18F North America 2% Western Europe 6% 3% 2% C&E Europe 8% 9% 13% China -2% -1% 16 17 18F 16 17 18F -2% 16 17 18F 2% 2% 16 17 18F South America 13% 11% Asia Pacific minus China 2% 5% 3% -12% 16 17 18F 16 17 18F
Brazil and Russia LV markets finally turning around 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Brazil Selling Rate (mn/yr) 3.5 3.0 2.5 2.0 1.5 1.0 Russia Selling Rate (mn/yr)! Will trend continue, and what risks are ahead? 7
North America Outlook 25 North America Market Forecast 2018 FY 20 1.6 1.5 1.5 1.5 1.5 2.0 2.0 2.1 2.0 2.0-3.5% 15 Mexico Millions 10 5 17.5 17.2 17.0 16.8 16.8 Canada USA 0.0% 0 2016 2017 2018 2019 2020-0.7%! North America sales slowing after record 2016 result! Expected to remain strong by historical standards 8
Europe Outlook 2018 Outlook European Market Forecast France: +80k Germany: +70k Italy: +80k Spain: +110k UK: -130k Russia: +210k Millions 25 20 15 10 5 0 19.8 20.6 21.3 21.9 22.3 4.0 4.4 4.8 5.2 5.4 15.8 16.2 16.5 16.7 16.9 2016 2017 2018 2019 2020 East West Turkey: 0k! Growth momentum continues in Europe, though UK acts as a drag! Limited growth in France and Germany beyond 2018 9
Global LV Sales 2018 Out of the Gate China Outlook 35 Stimulus package + payback Growth + mini-stimulus, restrict car purchasing. Tax cut in late 2015 and 2016 Reduced tax cut, payback Return to growth, but ongoing policy risk 60% 30 25 20 15 10 5 50% 40% 30% 20% 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Volume, Mn (RHS) Growth (LHS) 10
Global Sales: Near-term! China still dominates growth as mature markets fade 105 100 95 90 85 Global Sales (mn) 2016 2017 2018 2019 2020! Short-term outlook remains positive! 2018 slow: China hangover and fading US/UK market! 2019 pick-up: China pace returns! Risks: Trade Tensions, Brexit, Russian isolation, Iran sanctions China USA Japan Germany India UK France Brazil Italy Russia Iran Contribution of Growth 17-20 -6% -6% -2% 0% 1% 7% 3% 8% 3% 14% 40%
GlobalizaEon Presses on! Global Sales: Longer term! Subtle movement as mature markets continue to lose ground to emerging 2018 % of Sales US 2025 % of Sales China 15% 17% WE Japan 17% 15% Korea India 5% 30% Russia Can/Mex Brazil 6% 31% 17% Iran Other 15% 97.5 Million 2.3% CAGR 114.1 Million 12
Global Production Millions 120 100 80 60 40 20 0 Rest of World Asia- Pacific 2017 2018 2021 2025 Healthy Stable 85% 79% 63% 63% NA AP 79% 79% 70% 66% WE EE 82% 81% 74% 72%! Asia CAGR 3% - Outpaces slightly Sourcing decision balance shifts to China! Europe CAGR 2% - EE and CE drive growth; WE flat! NA CAGR 1% - Growth restarts post 2020 with investment Risk SA 62% 47% 46% 53% MEA 65% 61%! SA CAGR 4% - Region in recovery mode though risk remains! MEA CAGR 6% - Growth to fill capacity but sanctions? 2017 2021 2025 13
Global LV Sales 2018 Out of the Gate Technology R&D and SUV importance is creating pressure to reduce activity in traditional areas 145 337 223 SUV 326 251 2015 2020 2025 MAV, sedan, hatch, wagon, sporty 293! Number of SUVs in production in North America and Europe grows! Number of conventional bodystyle models falls! In 2017, 32% of LVs were SUVs, with this set to grow to over 36% by 2020! Conventionals still retain largest market share 14
Global Light Vehicle Fleet Global LV Parc (bn)! The combination of Autonomous Vehicles and Shared Mobility likely to disrupt ownership model, though not for some time 1.3 1.7! Sales nearing 100 mn units/year. Scrappage will continue to rise (from circa 50 mn/year to 60 mn/year); further parc growth inevitable! Mature market fleet growth to slow while emerging markets see rapid fleet increases. 2017 2025! Positive momentum for Aftermarket industry
Global Truck Production (GVW>6t) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Global Production, by Region (mn) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Other North America Europe Asia! The global truck market (GVW>6t) posted a new record in 2017, with sales rising to 3.0 mn units (+21%)! China drove sales and production higher, though some moderation this year
Outline! Current global automotive environment! Trends and medium-term outlook! Long, long-term transformation
Global LV Sales 2018 Out of the Gate Many things to be solved before shared AVs can work 18
Summary AV forecasts Global Sales of all Light Vehicle by Type (mn) 160 140 Light Vehicle Sales, alternative future, if no AVs 120 100 80 60 40 20 0 Level 0-3 vehicles, includes up to Level 3 (conditionally autonomous) Shared L4-5 AV Owned L4-5 AV 2020 2025 2030 2035 2040 2045 2050 19
Summary! Global economy solid in near-term, with growth forecast across major economies! Auto industry well placed for another strong year globally though risks remains, including: economic, political, industry-specific! SUVs will continue to outpace industry and all other segments! Parc continues to grow and disruption from Autonomous Vehicles still some time away
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