The Long-term Perspective: IHS Scenarios to 2030 applied to Automotive Presented by: Nigel Griffiths Chief Automotive Economist IHS Automotive
Millions Global Light Vehicle Sales: A Growth Industry Once Again! 120 110-5% -4% 13% 3% 10% 100 90 Emerging Markets Take-off Point 80 70 60 50 40 30 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 The Global Redesign or base scenario assumes that current trends in vehicle use are not sustainable given the projected developments in the standards of living, wealth and population dispersion Even so 2.1bn new vehicles are sold between 2010 and 2030 100% of the net new growth in sales comes from emerging and growth economies (after the five year cyclical recovery from the great recession) Vehicle mix drifts to smaller segments with the trend accelerating in the mid 2020 s June 2011 Interim Pre forecast 2
Millions 2020 2018 2016 2014 2012 2010 2008 2006 2004 2002 2000 Two Automotive Worlds: Long-Term Growth Only In Emerging Markets 50 45 40 35 Light Vehicle Sales 30 25 20 15 10 5 Triad LV Sales BRICs LV Sales 0 Note: Triad comprises USA, Japan & W. Europe 3
Automotive Development and Globalization Market Openness Maturity Matrix, 2007 Open Markets Closed Markets High Maturity (>300 Cars / 1000 Persons) High number capita & low i.e., Triad Markets, Australia, Kuwait 60% Closed = High CBU tariffs (>20%), Quota s or Substantial Non Tarrif Barriers Empty Quadrant Developing Low Maturity (<300 cars / 1000 Persons) 0% CAGR Low number capita & low 10% i.e., Mexico, Gulf CC, Oman Turkey, South-Korea, Caribbean, Slovakia Low number capita & high i.e., Russia, China India, Egypt, Mercosur-Region 30% 2007 (pre crisis) BASE YEAR WORLD AUTO SHARES, CAGR are trends to 2030 <2% CAGR 5% CAGR 4
Developing Low Maturity (<300 cars / 1000 Persons) High Maturity (>300 Cars / 1000 Persons) Where We Are Heading: By 2030 Demand will be Shifting Towards a Cluster of Dirty Open Markets Open Markets Closed Markets High number capita & low i.e. Triad Markets, Australia, Kuwait 42% Closed = High CBU tariffs (>20%), Quota s or Substantial Non Tarrif Barriers Low number capita & low 4% i.e. Mexico, Gulf CC, Oman Turkey, South-Korea, Caribbean, Slovakia 3% 41% Dirty-Open Low number capita & high e.g.. India, Egypt 10% 2030 Global Redesign World Auto Shares IHS_Global_Scenarios 5
Three Global Scenarios Contrasting Characteristics at a Glance 6 6 6
Economic Developments Reflect Global Scenario Impacts 6.0 5.0 4.0 Annual Average Percent Change in Real GDP 3.0 2.0 1.0 0.0-1.0-2.0 1990-2008 Average Growth: 3.0% History Global Redesign Vortex Meta -3.0 1990 1995 2000 2005 2010 2015 2020 2025 2030 7
Energy Prices Add Into the Picture, Creating Economic and Social Rifts $180 $160 $140 History Global Redesign Meta Vortex Annual Average Crude Oil Price per Barrel (nominal US$) $120 $100 $80 $60 $40 $20 $- 1990 1995 2000 2005 2010 2015 2020 2025 2030 8
Global Auto Sales Differ by Millions over the Three Scenarios 140 Global Light Duty Vehicle Sales by Scenario 120 100 Million Vehicles per Year 80 60 40 Global Redesign Vortex Meta 20-2000 2005 2010 2015 2020 2025 2030 9
Key Findings From The Auto Sales Scenarios In a Vortex World - the pressures on sustainability of private transport are partially relieved by the prolonged period of austerity and less pursuit of CO 2 reductions on a global scale Cumulative sales of 1.7bn light vehicles occur in the period 2010-2030 this is 18% below the planning case with average annual sales some 17m lower Developed markets reach their tipping point sooner and are in long term trend decline for most of the scenario horizon Emerging markets unexpectedly track sideways for more than a decade as wealth generation and dispersion are limited by the slower pace of globalisation. This also prevents significant progress on the globalisation of vehicle sourcing By the early 2020 s the B segment exceeds 20% of the global market for the first time despite the soft targets on CO 2 and associated lax taxes. Premium segments see share erosion In a Metamorphosis World - multiple price pressures on consumer choice force behaviour change in the context of hard CO 2 targets & taxes and new modal technologies Growth is straightjacketed by carbon sustainability for the next 15 years Cumulative sales of 1.87bn light vehicles occur in the period 2010-2030 this is around 10% below the planning case with average annual sales some 10m lower Mature markets suffer most of the volume adjustment until low carbon growth is realised around 2025 Alternative transport systems appear with car sharing and virtual mobility limiting conventional motorization Towards the end of the period EV s versatility improves helping stabilize share losses in the larger segments Smallest vehicle segments grow with new urban EV concepts, mega city circulation restrictions and favourable tax treatment. The A segment grows to over 13m units or 12% of world demand -a 30% higher share than in global redesign 10
Thank You for Your Participation! Presented by: Nigel Griffiths Chief Automotive Economist IHS Automotive Download a copy of this presentation at: www.ihs.com/events/springweoc11