2015 Outlook of the Global Automotive Industry The Market

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Presented by:

Lorena Isla

Director, Mobility Latin America

INTELLIGENT MOBILITY

Digital Transformation of the Automotive

Industry

DHL Automotive Innovation Conference

Mexico City - Oct 27th, 2017

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Source: Frost & Sullivan

The Five Pillars of Digitization in the Automotive Industry Digitization underpins the transformation of business activities, process improvements, and the development

of new competencies and business models across 5 key areas within the auto industry.

New Business Models

Key: VRM—Vehicle Relationship Management; HMI—Human Machine Interface

Connected

Supply Chain

• Value chain

disruption

• Intelligent

fulfilment

• Responsive

supply

networks

• Smart

logistics

Industry 4.0

• Simulation

modeling

• Smart

communication

• Cognitive

manufacturing

• Contextual

intelligence

Connected and

Autonomous Car

• Connected

living

solutions

• Autonomous

cars

• Driver/vehicle

centric

services

• Advanced

HMI and

cognitive

technologies

Digital Retailing

& VRM

• Digital retailing

• Omni-channel

retailing

• Future stores

and showroom

concepts

• Aftermarket

parts and

service

digitization

Mobility as a

Service (MAAS)

• Integrated

mobility

• Journey

planning

and smart

payments

• Sharing

economy

• Evolving new

business

models

3

Assembly Line

Part bins Part bins Part bins

A B

A – Connected Inventory

Management

B – Embedded

Intelligence

C – Product

Traceability.

D –

Sensorization

E – Supply Chain

Integration.

E

Connected

products, service opportunity,

real-time customer

feedback to be incorporated

in design changes,

modifications, etc.

Connected

Product

C

B A

C

Stores


Future of Automotive Supply Chain—Connected Supply Chain Future automotive connected supply chain targets substantial improvements to the value chain through

enhanced efficiencies, reduced costs, greater collaboration and more innovation.

Pa

rts

Su

pp

lie

rs

D

Automotive Digital Transformation Market: Connected Supply Chain, Global, 2016

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Industrial Internet of Things (IIoT) and Impact on Automotive

Manufacturing—Automotive 4.0 Digitization, Agile manufacturing, Supply chain integration and data analytics are core enablers of IIoT.

Digitization

Agile Manufacturing

Supply Chain Integration

Data

Analytics

Influx of ICT-based applications

complementing core industrial

platforms for increasing

innovation, reducing lead times

and maximizing productivity

Increasing flexibility of

manufacturing processes to

facilitate ad-hoc design and

engineering changes

Unifying protocols, standards,

and systems across value-chain

networks for improved efficiency

Predictive, preventive and

prescriptive analytics for

processes, minimizing

operational bottlenecks and

operational inefficiencies

Core Enablers of IIoT

Inte

rne

t o

f In

du

str

ial T

hin

gs

(IIo

T)

Data Deluge Artificial

Intelligence Sensor Fusion

Cloud Computing

Real time Information

relay and data

security

Cognitive systems

for full autonomy Machine to machine

communication

Advanced

Manufacturing

Systems

Converged Infrastructure

& shared services

Flexible and on demand

personalised &

customised

manufacturing

Key Elements of IIoT

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Automotive 4.0 in LATAM—Smart Manufacturing and Robotics FCA manufacturing facility in Pernambuco, Brazil underpins aspects of Industry 4.0 and the future

of automotive manufacturing.

Simulation

• 3D software simulations to help

operators in the assembly line

Robotics and Automation

• 650 robots in the body shop

o 18 robots by Comau applying 100 welds in 60 seconds

offering flexible configuration

• 10 robots in the assembly

• 40 robots in the paint shop

Communication Center

• Rapid decision-making, efficient plant organization, and

optimized information flow—the key focus points

• Real-time testing of supplier parts and components—zero

tolerance

• Process center for training and testing

Supply Chain Integration

• Integrated on-site supplier park

Cognitive Manufacturing

Contextual

Intelligence

Smart

Communication

Simulation Modeling

Sustainability

• Primerless technology in the paint shop

lowering emissions and energy

consumption

Ergonomics (from Human-to-Machine to

Machine-to-Human)

• Ergonomic assembly line to reduce operator effort

and uncomfortable movements

• Automated powertrain mounting process

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Big Data from Connected Cars Offering Cost Savings New product analysis, digital leads, reduction in warranty costs, and cost-savings are among key

benefits of harnessing Big Data from connected cars.

Digital Leads

Integrated

Traffic

Management

Warranty Costs

Reduction, Predictive

Maintenance

User and Dealer

Satisfaction

Product Performance Analysis,

Production and Supply Chain Enhanced Product Development

and Testing

Services: Usage-based Insurance,

Parking-as-a-Service, Advanced Mobility Services, Dynamic

Navigation

Co-operative and

Automated Driving: Self-Learning Cars

Connected Cars Market: Big Data from Connected Cars offering Cost Savings, LATAM, 2016–2023

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Digitalization Reshaping Automotive Retail Process New automotive retail formats are disrupting how consumers of the future will connect and relate

to OEMs brands. Experience centers and flagships stores are growing in LATAM.

Note: Not a comprehensive list of examples. Images used for illustration purposes only. Source: Frost & Sullivan

3rd Party Online

Stores

Web Sites offering

customers a huge database for multiple car

brands with:

• Vehicle configurator

• Price

comparison

• Best deals

• E.g., Rodati

Live Online

Interface

•OEM/Dealer

Web sites to facilitate online sales with car

configurators, and visualization

tools

•Virtual configuration

•Shorter purchase process

•E.g., Fiat LiveStore Pilot

Experience and

Lifestyle Stores

Lifestyle stores

offer a strong automotive brand experience

through lifestyle-related concepts

• Mercedes Haus

(Buenos Aires)

• Audi Lounge (Sao Paulo, Brazil) and Audi

Driving Center (Buenos Aires)

Concept and

Flagship Stores

• Personalized

experience

• Virtual experience

• Digital retail cycle

• “OEM brand as an experience”

• E.g., Renault Garagem,

Hyundai Experience

Pop-up Stores

• Pop-up stores

are usually temporary stores with 3D

visuals and QR codes at high-

traffic locations designed to draw the

public’s attention

• Airports and

shopping malls

Automotive Retailing: Digitalization Reshaping the Automotive Retail Process, LATAM, 2016

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Digitization Reshaping Automotive Retail Process (continued) Digital automotive showrooms of the future are complemented by a physical store that supplements

the online experience allowing customers to experience the product hands-on.

Digital Displays and Video Wall

Vehicle Configurators and Racing

Simulators

VIP and Customer Area

Virtual Test Drive – 3D glasses and

sensors

Brand Shop

Limited On-Floor

Inventory

Image Source: Hyundai Flagship Concept Store Avenida Sumare, São Paulo.

Table Touch Screens

Auto Library and Digital Content

Brand Experience Furniture and Digital

Signage

Gourmet Coffee

Virtual Store and Model Visits

(partnership with Google)

OEM Accessories

Gourmet Food

Models Showcasing

Video Wall and Digital

Displays

Customer Center

Touch Screens and

Digital Content

Gesture, QR, and

Sensor Technology

Image Source: Audi Lounge, Oscar Freire, São Paulo

Through lifestyle-related concepts of art, fashion, music, design, food, and

technology, Audi’s Lifestyle stores offer a strong automotive brand experience. The store is not centered around the actual sales transaction of a car.

Hyundai’s Digital showrooms feature various digital tools specifically aimed at

enhancing both the retail and brand experience. It does not necessarily involve the actual sales transactions.

Brand Culture and

History

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Digitization Impacting Aftermarket Services—“Internet of Parts” and

Virtual Garages Companies such as Itaro and Rigs are disrupting the aftermarket with on-demand services.

Personal

Devices

Home

Work Shop

75

Certified

Professionals High

Quality

Assurance

Sustainability

Innovative

Delivery

Strategies

Competitive

Pricing and

Large Product

Selection

Big Data

Provider

Large

Geographic

Coverage

Virtual

Garage

B2B

Services

Automotive

Marketplace

Fast and

Easy

Services

Automotive Aftermarket: Digitization Impacting Aftermarket Services, LATAM, 2016

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Product sales

spare parts sales

Maintenance and

operation fees

Upsell premium features

Lower customer care costs

Risk and revenue sharing

Linear revenue model

TR

AD

ITIO

NA

L M

OD

EL

Normal product sales and spare supply – Traditional

model

Predictive analytics on the products to reduce the customer care costs

Service experts and customer care

centers for recurrent revenues

Introduction of new models like pay per

hour/minute, pay as you use, pay per mile

AS A SERVICE

MODEL

Next?

Value-added

Aftermarket Services Smart Mobility

Software-related

Services Optional Equipment

As A Service

• Extended maintenance and warranty packages

• Connected services: Navigation and infotainment

• Vehicle upgrades via over the air (OTA)

• Usage-based insurance

• Smart payments

• Renting and sharing models, eHailing

• Fractional ownership

• Smart parking

• Integrated transportation modes

• Packaging with connected services and personalized content

• OTA updates, security, and Big Data analytics

• Infotainment OS, telematics platform

• HMI tooling services

• Autonomous software packages

• Cloud services

• Test equipment for automotive

• Tire as a service/Battery as a service

• Infotainment module as a service

• Accessory as a service – Aftermarket – lights and horn

• Car as a service – autonomous and traditional

As-a-Service Model Evolution in Automotive The future will evolve to include unbundling of components to form “as-a-service” businesses.

Mobility- and software-as-a-service will account for a majority of revenues.

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Mobility-as-a-Service (MaaS) in Mexico TDF Card, Moovit, and ViaDF are key examples of integrated mobility solutions and a move

towards it in LATAM.

Bike

Sharing

Intercity Buses

Vehicle

Parking

Possible Future Opportunities

Car Rentals

MOOVIT

Mobility Journey

Planning App

Recharge of

TDF card

Integrated Mobility Option in

Sao Paulo, Brazil

Mobility Market: MaaS, LATAM, 2016

Metro

Subway

Car Sharing

Conceirge

Services

Micro Mobility

Urban Train

Mobility

Budgetss BRT

Connection with

E-HAILING (UBER)

Information of BIKE

SHARING (Ecobici)

Sin

gle

Paym

ent

Pla

tform

B

2C

and B

2B

Mobili

ty

at

the C

ity L

eve

l

Tren Ligero

Metro CDMX

Metrobus

Ecobici Bike Sharing

Current Services

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Thank you!

Q&A

Documents

2015 Outlook of the Global Automotive Industry The Market